Euro to Pound & Dollar Exchange Rates Plummet: Conversion Rate Now @ One Year Low

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Euro rate today, latest spot FX market quotes (04/09 - all quotes compare to the previous days closing level):

• The euro to pound sterling exchange rate is 0.84 pct lower, 1 EUR converts into 0.7922 GBP.
• The euro to US dollar exchange rate is 1.59 pct lower on a day-to-day basis - 1 EUR converts at 1.2941 USD.
• The euro to Canadian dollar exchange rate is 1.63 pct lower, the conversion rate is 1.4087.

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British Pound Falls vs Euro as Scottish Independence Race Tightens

This is a good time for those looking to buy sterling with their euros as we are now looking at decidedly better rates than we were 24 hours ago.

The pound slid after a YouGov poll showed support for the pro-independence movement in Scotland rose to 47% ahead of the September 18th referendum.

"The heightened uncertainty ahead of the vote is keeping investors wary of holding pounds," says Omer Esiner at Commonwealth Foreign Exchange.

Euro Dollar Rate at One Year Lows

Meanwhile, the euro dollar rate continues to struggle in this new environment of US dollar strength.

There are a couple of reasons for the dollar's dominance at the present time. Esiner tells us:

"The euro fell to a new one-year low against the dollar after PMI data for the 18-member bloc confirmed the anemic state of the economy and all but cemented expectations for further monetary easing from the ECB.

"The single currency remains particularly vulnerable given the view that the ECB will soon embark upon a campaign of money printing and asset purchases in support of its moribund economy.

"In addition, the escalating conflict between Russia and Ukraine and the expected impact on Germany’s economy from sanctions with Russia are expected to act as a major headwind to growth."

The ECB: What Will They Do

The big risk for the euro going forward happens to be the European Central Bank decision, due this week.

We have reported already that Deutsche Bank are positioned for the very euro-negative event of private quantitative easing being announced.

Analysts at Berenberg Bank meanwhile reckon the outcome won't be quite as drastic just yet:

"While the ECB probably needs a few more months to prepare asset purchases, we expect Draghi to announce that the preparations for ABS purchases will be concluded soon and those for outright quantitative easing will start in earnest, with a view to have both ready for a decision by the end of the year.

"Full-scale QE needs political backing from Berlin in order to overcome Bundesbank opposition and potential legal hurdles.

"The rapid economic cooldown increases the chances that Berlin will accept QE in the end, but the ECB and Germany may seek reassurances from Paris and Rome that more structural reforms are on the way.

"Draghi’s musings about fiscal stimulus seem to have antagonised some in Berlin. He is likely to tone down his views on that in the press conference."