When will the Euro strengthen?
Over the last few trading sessions there has been little economic data released which is the traditional driver for changes in the price of a currency. This is fairly standard as we enter the last few trading sessions of the month, and as a result the markets are driven by political drivers and bond market prices. This leaves us in a difficult, reactive situation due to the many high rank meetings taking place across Europe and the US to try and resolve the stress and concern on the Eurozone failing. Yesterday the US was meeting with Germany and over the weekend the Germans and French meet again releasing a unified front that the euro will not fail. It was also only Friday when the president of the European Central Bank, Mario Draghi, pledged that he is well positioned to resolve the crises.
So what does this mean for exchange rates?
Well the general trend has been that people have been pricing in the possibility of a new release on Thursday when the interest rate decision is decided across Europe. Stock markets have railed slightly and the Euro has gained some strength. However, will this really happen or is it just another unified front with no real change. All I can say is that it is in the Europeans interest to reinstall confidence and make changes for a better Euro. So anyone with a currency exchange to make should review their calculations, and their risks and make sure you are covered before Thursday this week. If however there is nothing, or just another limp release expect repercussions, as all the positivity put into the euro recently evaporates in just a few minutes.
If you are buying the euro, I would hold off but limit risk. If I was a seller of euros I would not take the risk and move before hand on the expectation of change.
Other stories to watch out for over the next 36 hours is the end of the month movements. This is traditionally Profit taking by traders that need to recognise margin to hit month end targets. This can change the markets over the 12 hours either side of a new month.
For an up to date forecast on your situation or to make sure you are getting the best exchange rates, feel confident in contacting an expert. You can contact myself through my email at firstname.lastname@example.org or by calling and asking for myself, Steve Eakins on 01494 787 478.