Euro strengthens on the back of the summit. What will happen with the Euro exchange rate over the next week?
The Euro seemed to go on a run strengthening against the pound and US Dollar on Friday. The latest Euro zone deal seemed to have bolstered world markets on the back of hopes for a long-term solution to the debt crisis.
The deal, brokered on Friday morning in Brussels, included a major concession from German Chancellor Angela Merkel that would allow European bailout funds to be provided directly to banks in a bid to help Spain’s banking sector.
In return, Germany received guarantees of more centralised supervision and regulation of member countries’ banking systems through a new euro bank regulator. On the back of this stock markets around the globe seemed to have settled down and the Euro finally had something positive to shout about.
The question is how long will this strength continue? With confidence back in the Euro the markets will be now moving on economic data for the region. On Monday the EU will be releasing their manufacturing data and unemployment rate for the whole region. Unemployment is due to get worse so you may find that the Euro loses some of its gains from the end of last week.
Towards the middle of the week their is inflation data and retail sales while the most important one of all is the interest rate decision on Thursday. I feel that the Euro will sill hover around the 1.23-1.2450 level against sterling and around 1.2550/1.2650 against the USD.
If you require selling Euros to buy either of the above currencies and was hoping that the current resolution would move the pound down to 1.20 against the pound then I am afraid I really cant see this happening. You must remember that their are still so many issues not sorted out in Europe and it will take a minor miracle for the Euro to strengthen so much.
If you do require buying or selling Euros then please email me with your requirement at bma@currencies.co.uk. I will then contact you to discuss all the options that are available to you to help you minimise your risk and make sure you get the best exchange rates available at the time of conversion.
