Is it now time for a spell of euro strength?
With all the waves of Euro negative news lately the rate has been at its weakest against sterling leaving anyone looking to selling Euros for commercial or private interests at a loss. The trend has only got worse and worse reaching a peak above 1.23 (below 0.8130). The euro rate has clawed back a bit trading at 1.2230 currently on GBPEUR, 1.3260 on EURUSD. Why is this and can we expect some further gains?
Well Spanish GDP yesterday confirmed Spain is in recession, but not as bad as thought. Spain in massively in the firing line but at the moment the threat of immediate danger does seem to have passed based on this news and the fact any bailout could be some time off. I do personally think it is only a matter of time now before Spain goes the way of Greece and if you are looking to sell Euros it is really worth biting the bullet and cutting your losses sooner rather than later.
The depth and breadth of this crisis will continue to be determined by upcoming economic data and political news. One week from now France will have a new President and it may be that this gives the market some calm whoever it is. Francois Hollande is not quite the ‘leftie socialist’ some view him as and he may fall in line if he does come in to power, once he realises the gravity of the situation. Would he really stand by and watch Europe and the Euro crumble? It is the answers to these questions we will have answers to soon…
How can I limit myself from these dramatic movements?
As specialist currency brokers we can help limit your exposure on the currency markets by offering a range of contract options all designed to help protect you from unfavourable movements.
Forward Contract – Do you know that you need to sell Euros in the future? If selling a property or receiving payment in Euros in the future, we can help book today’s rate forward for up to 2 years. This means that you know in advance how much it will cost you when that day arrives. A very popular option at the moment with so much uncertainty and the prospect that the Euro is only going to weaken more. Speak to me to find out how this option works in practise on 01494 787 478 or email directly on jmw@curencies.co.uk
Stop / Loss – This is proving popular as it protects your current rate. If your profit margins on an investment depend on not getting ‘worse than’ a certain rate, a stop / loss ‘stops’ further losses. You choose the rate and we enter it on our system. This automatically watches the rate and you are guaranteed to not get worse than a certain rate.
Limit – The same as a stop / loss but you choose a higher rate you wish to trade it. If the rate moves up to your level at any point, even for a second, your rate is guaranteed.
You could even hedge your risk by looking at these otions on different amounts of your funds. That way you are not leaving it all to the risk of market movements.
As well as these, we can offer assistance with the actual timing of your exchanges. If you are unsure about the various options to you why not take the stress out of the decision and talk to a specialist. I work for an award winning currency brokerage in the UK and we write this blog for information for our clients and new clients alike. Feel free to contact the author directly on 01494 787 478 or email directly on jmw@curencies.co.uk
I look forward to hearing from you
