Tag Archives: euro debt

Eurozone News – China Shouldn’t Buy Euro Debt

September 21, 2011   Economic Information, Euro Strength, euro weakness, The Week Ahead

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.

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Sports change the market – when to buy?

December 2, 2010   Euro Strength

Earlier today we have football make its difference on the market as we saw the UK miss another bid to host the football world cup. This brought yet more weakness to sterling today after the European’s added confidence at last to the bond market.

Over the next few days I think it has become ever more difficult to predict a clear direction for the currency market. After the Irish bailout sparked concerns about debt spreading across Europe bond markets have been climbing at a record pace. These hikes made the loans more expensive to have, repay and importantly insure which added to the cycle of euro weakness. However today the ECB head released a strong statement trying to re-introduce the much needed leadership in the single currency that have helped euro regain some losses.

GBPEUR is still trading close to a 8 week high. In my option I would take any opportunity as this time next week we could be in a very different situation.

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Euro Strength but for how long?

June 8, 2010   Euro Strength

Today the Euro has strengthened against most currencies as the markets swing back from the large losses seen over the last few weeks. Clients changing euros may like to take advantage now as in my option I think the Euro will continue to weaken. 

Some leading economists now think that EURUSD could reach parity this year as many think it is becoming more and more likely that the Euro will break down in the coming 5 years.  And you can understand why, with more and more countries traditionally seen as safe falling into despair.  The stark figures showing that over 65% of loans to countries within the euro are provided by other states, this in my option is one of the largest reasons why I think the debt illness is likely to spread further.

If you currently have Euro’s that you are looking to move to another currency to protect your exposure, feel free to get in contact for further, more detailed information on your particular position.

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