Greek Prime Minister George Papandreou has stepped down and a replacement is expected to be named shortly. The Euro still remains very weak and the pound is pushing close to a 9 month high. If a smooth transition in power takes place and the new government can distance itself from the recent referendum plan then the Euro may begin to strengthen back as we get a bit more certainty. However, should the instability continue the Euro exchange rates may slide further, although the Bank of England Meeting may put the brakes on much more sterling gain. The G20 meeting last week had a lot of strong supporting statements from leaders but was very short on detail. It was also interesting to see China and many others withholding further funds until more securities can be made. If you would like more information then please feel free to call +44 1494 725 353 or e-mail email@example.com
As mentioned last week key players in the Eurozone crisis have downplayed the importance of the summit to try and dampen expectations that an all encompassing solution will be announced. At the time of writing the EU leaders are just arriving so expect some volatility on various currencies. The summit will aim to solve the Greece problem, bank exposure, and how the EFSF will be used but I think there is likely to only be some general broad agreements on parts of the 3 issues. Sterling euro rates have been pretty range bound in the last two weeks but if no solution is reached the Euro could drift higher against the pound and I would expect the Dollar to strengthen back with the uncertainty. If you would like to be informed of any breaking news affecting your currency transfer then please e-mail firstname.lastname@example.org and I would be happy to update you.
Any announcement from this weekend’s summit to tackle the Eurozone debt crisis is expected to be delayed, and German officials have already stated earlier this week that any agreement is not likely to be as far reaching as some sectors originally expected. To me it suggests the crisis is likely to continue to run and with riots once again breaking out in Greece I cannot foresee any quick solution. I think a controlled default for Greece would be the best finance ministers could hope for and hope to prevent any contagion to other Euro states like Portugal, Ireland, and Spain (the latter two have made strong inroads in tackling their own budget deficits). The Euro has weakened again this morning against the Pound after a volatile week ranging from 1.1360 to 1.15+ but an anticipated indecisive outcome for the weekend will likely mean the Euro will drift further through next week. If you have a requirement you would like the team here to keep an eye on then please feel free to e-mail me at email@example.com
UK unemployment figures yesterday suggest recovery in the UK is stalling and endorse the Bank of England’s view to try and kick start the economy recently. As a result the pound has been slipping at a time when the Euro is gaining in strength due to greater confidence following Slovakia’s approval of the Euro bailout extension. GBP EUR rates have moved over 3% lower from last weeks 7 month high and highlight how difficult it is to trade in such a volatile market. If you do have a requirement and want someone to keep an eye on a target rate then please call 01494 787 465 and ask for Colm
Euro exchange rates are still under heavy pressure although this has eased as fears over the sovereign debt crisis eased slightly as further bailout talks continued. However the credit downgrade of many UK institutions and Belgium’s bailout of Dexia bank highlight just how volatile GBP EUR rates are likely to be. The lack of an interest rate cut last Thursday helped create a little more confidence as it suggests the ECB do not feel things are not as desperate as to merit a cut (the benefit of which masy be questionable anyway) and the recapitalisation of European banks has halped the Euro to fight back to levels close to Thursdays high against the pound. If you need to buy or sell Euros and want to take advantage of the current volatility then please feel free to call 01494 787 465
Yesterday saw huge movements on GBP EUR rates as the Bank of England extended the Quantitative Easing program by £75bn. Sterling immediately lost ground against the single currency dropping by 1% in minutes and focus switched to the European Central Bank and Jean Claude Trichet’s last meeting as the President. There was an outside chance of an interest rate cut but this failed to materialise and the Euro held steady. Earlier in the week rates were over 1.17 and late yesterday they were closing on 1.1450. Already this morning we are approaching 1.1550 so expect continued volatility.
Euro Dollar rates will be dependant today on the outcome of non farm payroll data later this afternoon so be prepared for this, and as ever watch out for any breaking news regarding the European sovereign debt situation and Greece. If you would like more info please call +44 1494 787 465.
Euro exchange rates are still slipping after the weekend’s news that Greek PM Papandreou admitted Greece cannot meet its burdens to receive the next bailout tranche. Whilst it seems inconceivable that Greece could be thrown out of the Euro it seems ever likely that a controlled default may be the only option. Added to the fact the ECB may cut interest rates on Thursday in Trichet’s last stand, the Euro should remain under pressure this week. The only saving grace if you are selling Euro and buying GBP is the possibility of and extension of the Bank Of England’s Quantitative Easing program- a move that could seriously damage the pounds recent run against a host of currencies.
Sterling Euro exchange rates have slipped following the Bank of England Minutes this morning. Whilst Quantitative Easing was not extended this month the minutes this morning said the decision was finely balanced and the economic conditions were increasing the likelihood of its introduction. It means October’s meeting may see large volatility on rates as markets try to second guess if and when it will be introduced. Combined with Jean Claude Trichet’s speechcoming up on Friday, and the fact that the ECB may cut interest rates at their next meeting, this currency pair is likely to remain volatile. Further announcements on Italy and Greece’s financial positions are also making analysts lives very difficult. If you have a requirement ot buy or sell either currency then feel free to e-mail firstname.lastname@example.org or call 01494 787 465 and I would be happy to discuss your options.
A former advisor to China’s central bank has said China should stop buying Euro bonds and should only do so if certain conditions are met. Whilst Yu Yongding’s views may not represent official Chinese policy, and China has regularly expressed confidence in the Eurozone, they have yet to lay out any concrete support package should the single currency remain in trouble. China holds over a quarter of its FX reserves in Euro and so its approach to this could be instrumental in any long term solution.
Euro Dollar exchange rates have moved around 6% in the greenback’s favour over the last few weeks as the Dollar has strengthened amidst a new flight to safety, especially as the alternative option, the Swiss Franc, has been made a lot less attractive by the Swiss National Bank.
Bank of England Minutes are released in 25 minutes so will be key to short term GBP EUR rates- be ready to move quick on any news of Quantitative Easing being discussed or not.
GBP EUR exchange rates will be very much dependant on the Bank of England Minutes due out tomorrow morning. Whilst the BofE didn’t increase their asset purchase program of Quantitative Easing this month it is unclear how close they actually came to doing so; the Minutes will reveal all as to what was discussed and the markets will use the information to forecast future bank policy and price this into the exchange rate.
As a result if following some very poor UK data some members of the Bank’s Monetary Policy Committee have pushed for an increase in QE then sterling Euro is likely to fall significantly. However should the bank remain optimistic about a slow but steady recovery in the UK then the pound may claw back some recent lost ground against the single currency. As the outcome is an unknown, and the scale of the movement in exchange rates potentially very large indeed, please do not hesitate to e-mail me for information once the news is published- email@example.com
A combined action by major central banks to increase Dollar liquidity has just been announced. The Euro has strengthened further on this move to stabilize banks and assist with the Eurozone debt crisis. For more information or if you have a transaction to make please e-mail me directly at firstname.lastname@example.org