Euro Rate Forecast

Whether looking to buy or sell the Euro current events are having a serious effect on the exchange rates on offer. For years and months many have talked of the danger of the debt crisis in Europe and it is now being properly reflected in the exchange rate. The rate has dramatically shot up lately and I cannot see any change in this current course, nor any reason to turn the tide.

Anti austerity parties are threatening to tear up the fiscal pact which had brought calm to the markets last year. It is only now we can see how the ‘Merkozy’ partnership was key to the Euro’s strength for the last few years. I doubt whether Francois Hollande will be quite as bad as predicted but it is the events once again in Greece that have really got investors nervous. The parties that have gained support are not only opposed to the fiscal pacts, they are also opposed to the bailout itself!

EURGBP Outlook

If you are looking to buy Euros with sterling, you are looking at a 3 and a half year high today. With the pound gaining favour on the back on eurozone uncertainty, the GBPEUR is heading in one direction only. If you are looking to sell Euros for sterling I am afraid things have got bad for you but may be about to get much, much worse. With no sign of abatement in the current crisis and the pound finding more and more favour, it looks like this type of transaction will only get more and more expensive. Even bad economic news like the fact the UK is in recession has not damaged the pound and since the UK is likely to be the first of the UK, US and Europe to be raising rates, I really think anyone selling Euros for sterling should act quickly to avoid further disappointment. If you do not need to make a EURGBP trade for sometime, do not worry we can still fix rates ahead for a future date utilising our forward contract option. Even if you are firmly of the belief that the rate will somehow magically go back to 1.15, I recommend making some kind of contingency. As a specialist currency broker I can offer free information on all of your options at this time. Feel free to email me on jmw@currencies.co.uk or why not call 01494 787 478 and ask to speak to me quoting ERF.

EURUSD Outlook

If considering selling Euros for dollars, I think current levels are well worth taking advantage of. Whilst the rate has of course dropped lately I fear it may get worse. At the moment the Euro is weak but the dollar is also weak! If this Eurozone crisis continues to escalate and we see a more risk off approach by traders, we will more than likely see the rate move towards the 1.26-1.27 range as theUSD is a safe haven currency. USD is used by investors in times of real uncertainty (which may soon be approaching) and whilst the US is performing reasonably well at present, Friday’s poor jobs report could be a sign that things are not all as good as could be. If looking to sell USD for the EUR, I think it may be worth holding on to see what happens in the coming weeks. The US dollar accounts for over 80% of all currency transactions so any big moves here will have a massive effect on the rate.

The current economic climate is still very fragile, particularly in the Western economies, Europe in particular. If Greece has to leave the Euro or there are further unexpected economic and political developments in Europe, you may find things get much much worse. Have you planned for the worst? This site has is for information for anyone looking to make a currency exchange. Working as specialist currency brokers for the UK’s largest independent brokerage, this site was originally written for our clients who wanted to know what to expect on rates. If you are considering any Euro trades (or any other currency) and would like some specific information relating to the transaction you need to undertake please feel free to make contact on jmw@currencies.co.uk or 01494 787 478, quoting ERF.