As August comes to an end, it is safe to say that our summer has been fraught with excitement and anguish in equal measures. Whether it was Mo Farah storming to double Olympic victory, or our monthly dose of doom and gloom as Bank of England governor Mervyn King discussed the fragility of the UK economy, it has become apparent that no one quite knows what the remaining months of 2012 will hold for GBP/EUR and EUR/USD exchange rates.
What is clear to me is that September is sure to be a defining month for the EU, with Greece and Spain once again making the headlines. The outcome of these two scenarios is key for the long-term stability of the EU and in turn the short-term forecasting of the euro against its major counterparts. We have already seen the single currency move approx 3 cents away from its 4 year low against Sterling and almost 5 cents away from its all time low against the USD. In fact the euro does seem to be gaining some momentum and made further gains against both GBP and the USD during Tuesdays trading. The single currency has been severely hampered during most of 2012, predominently by the on-going EU crisis. Whilst these problems continue to persist, it is conceivable that the recent inroads made by the euro may be short-lived and for that reason it is important to stay in contact with your currency broker, to ensure you can be reactive to any market movements.
As I mentioned in my previous blogs I did feel it was more likely that GBP/EUR would move towards 1.25 than 1.30, even when Sterling reached its recent 4 year high. My gut feeling now is that we will see GBP/EUR rates rangebound between 1.25-1.27 whilst September’s economic events unfold and EUR/USD levels could continue to move away from the lows of 1.2099 we saw towards the end of July.
Here at Foreign Currency Direct plc we provide a wide variety types, including our forward contract that is specifically designed to eliminate future negative market movement. If you have an upcoming currency requirement or would like to be kept up to date with all the market movements for a future foreign property purchase then please feel free to contact me directly at firstname.lastname@example.org or on 01494 787 478.