Firstly may I take this opportunity to wish you all a Happy New year and I hope you haven’t over done it during the festive break!
Now back to the serious business and the prospects for the Euro as we head into what is undoubtedly going to be a very interesting year for Europe and the global economy. The question for many is can the Euro Zone dig itself out of this ever deepening hole? Will the UK’s growth forecasts be as poor as projected? Has President Obama’s confidence in the US economy led investors towards the dollar more in hope than expectation? Unfortunately to answer these questions many will have to adopt a wait and see approach, something that is probably sensible if you have the luxury of time on your side, however for those with a more immediate requirement, my opinion has not been clouded by over indulgence in Christmas turkey and mulled wine! I feel short term directions for the Euro look bleak. Indeed in a recent poll by Deloitte’s 37% of the economists surveyed expect one or more member states to leave the Euro, something I personally feel will not happen but there certainly is a real chance.
What are the short term projections?
For me currently the pound is a safer bet than the Euro, and the Dollar a safer bet than both the Euro and Pound. For this reason I feel we will see some strong buy opportunities for GBP/EUR and USD/EUR – those selling Euros may look to arrange sooner rather than later as I feel it could be some time before a resolution to the problems in Europe are seen. I am a firm believer that Europe is too big to fail and I believe an agreement will be made but without getting my crystal ball out I have no idea when this could be. Once this has been resolved we are likely to see a reversal of current trends as confidence in the market returns and the ‘safe haven’ tag of the dollar is loosened leading to a sell of dollars and reduction in value. As for GBP/EUR I feel a move back to 1.15 could be seen as the overriding problems in the UK (poor growth, rising unemployment, increased government borrowing costs) inevitably take their toll on the pound. This could take some time and for now I think the Euro will remain the weaker of the three currencies.
Should you have an upcoming currency transaction whether selling or buying Euros and you would like assistance with the transfer or to discuss the various contracts we can offer then please email me at email@example.com