euro rate on the increase.

donmax777

I have just seen that the latest rate against the euro is up to £1= 1.11
Can anyone enlighten me as to why it is on the increase and what actually determines and effects the rate.I rely on exchanging sterling to euro's so long may the increase continue,although i can never see it returning to 1.50 again!

gozomark

why ? because

1. nearly everyone was negative, so who was left to sell ? - a couple of weeks ago, there was post after post on this forum of people saying it was guaranteed £ would reach parity with the €
2. Eurozone inflation dropped below 2%

what determines exchange rates ?
supply and demand, with the occasional central bank intervention. Supply and demand are driven by (1) trade in goods and services (2) investment flows (3) speculation/trading

i can never see it returning to 1.50 again! - never say never - in 1985, £ almost hit parity with the $ - last year it was above $2 to the £ - its now around 1.50