The EUR has faced a sell-off during early week trading, following news that German Chancellor Angela Merkel has failed to form a majority government.
With coalition talks breaking down, investors immediately pulled their funds away from the EUR causing it to weaken against the majority of major currencies.
EUR/GBP rates dropped by over a cent, falling to 1.1290 this afternoon. Despite it finding some support under 1.13, this news has clearly knocked investors’ confidence in the region. This is likely due to the German economy being a key component of the Eurozone make up and one of the driving factors behind its improvement over recent months.
Today’s move is a stark reminder of how quickly market conditions can change and another reason it may be prudent to avoid risk by talking advantage of the huge gains seen for EUR sellers over recent months.
Any client with a an upcoming EUR currency requirement should be keeping a very close eye on developments, as any further breakdown or talk of a re-election could heap further pressure on the single currency.
Despite today’s downturn, EUR sellers are still looking at extremely attractive exchange rates against both GBP and the USD, especially when you consider the issue on each pair.
The EUR has performed better than almost every other major currency during 2017, over exceeding almost every analysts early year predication’s.
Yes, it has been boosted by a downturn in UK economic output and the on-going ramblings of President Trump but this does not paint the full picture. Eurozone growth forecasts have been raised, whilst economic output & investor confidence has grown rapidly.
The bottom line, as indicated by the recent trade balance figures, is that their profits are outweighing spending.
Ultimately this is what it all boils down to and despite the Eurozone having some underlying issues of its own as I’ve mentioned, the overall perception of the Eurozone economy is clearly far healthier than that of the UK’s.
Having said all this, I do have a sense that the EUR has almost reached its peak based on the current market information. Based on how much support its gained against both Sterling and the greenback, I would probably err on the side of caution and remove any market risks.
If you have an upcoming EUR currency transfer to make you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.
Our award inning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.
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