Tag Archives: Euro rates
Political uncertainty rocks the Euro!
A double whammy of political uncertainty following French and Greek elections has this weekend rocked the Euro, sending it to a 3 ½ year low against the pound and a 4 month low against the dollar. If considering any Euro transactions, even if months or years down the line, these events will surely be vital to the future direction of the Euro rate. The uncertain outlook in Europe is actually giving the pound strength so if you are selling a foreign currency and looking to buy the pound even if months down the line, now may be the perfect time to limit your exposure utilising a forward contract. To speak to me or one of us about all of your options you can contact the trading floor direct on 01494 787 478 or email me personally on email@example.com
Austerity Verus Growth?
The new French President Francois Hollande’s anti austerity agenda contrasts directly with the approach to the European debt crisis epitomised by the previous President Sarkozy and German Chancellor Angela Merkel. And this weekend in Greece, elections have given anti austerity party’s massive support. It is this uncertainty that has caused the Euro to weaken.
Investors and the markets however favour the austere approach seen by the UK. This is one of the reasons the pound has found so much favour lately despite the fact the UK is in recession. The pound is currently at a 33 month high on a trade weighted basis. With the uncertainty in Europe set to continue there are still a number of outcomes which could affect the Euro and the pound. Of course nothing is guaranteed on exchange rates and whilst it looks like these trends may continue the economic conditions for the UK are still extremely fragile and should not be taken for granted. A fairly quiet week on the economic data front does contain the Bank of England Interest Rate decision on Thursday. If considering any transactions involving the pound these excellent trading levels are well worth monitoring. Stop / Loss orders stop you getting a ‘worse than’ rate should the market drop. A ‘Limit’ order enables you to choose a higher rate for us to automatically buy at should the market reach a certain level. If a corprate or private individual with a budget or profit margin to protect, these orders are critical to guaranteeing you are protected from market fluctuations.
Unlike some Western commentators I have been very supportive of the European project. Too many times the Euro project has been criticised and I have maintained a balanced view on the outcome. But these latest developments are really concerning. The economic conditions have deteriorated. Now the Far Right and Far Left political parties are gaining support in the countries making governance even harder. Germany has been seen as the key to promoting the Euro’s strength. But on a daily basis we are seeing the strength of Germany and as such the Euro project undermined. I now have to ask myself where is all this heading? For anyone holding Euros or indeed any other currency looking to buy the pound, I really think now is the best time to pounce. The double whammy is that the UK is finding support because of the budget deficit reduction measures. The UK is looking like the next major currency to be raising interest rates, and investors are preparing themselves. Even if you don’t pull the trigger today, if considering any Euro trades, you should really be loading the gun…
Even though I am a currency specialist working for one of the UK’s leading currency brokerages I cannot sit here and tell you exactly what will happen, no one can. But I can help you get the very best exchange rates and offer my personal assistance with the timing of your exchange. We offer a highly personal account manager service and a range of contract options to help limit your exposure which is critical to maximising your exchange rate. Even if you have already made plans, it is always worth a second opinion and double checking you really are getting the best deal on the rate. I can help you do this for free today. Please call (+44) 01494 787 478 and ask to speak to me Jonathan quoting ERF. Or email directly firstname.lastname@example.org
I look forward to hearing from you
After initial weakness this morning following a rise in European unemployment levels, the Euro made big strides after a surprise announcement of Central Bank cooperation to maintain liquidity in markets. The unexpected move saw the Euro gain nearly 3/4 of a cent against the pound before slipping back later, but just goes to highlight how short-lived some spikes can be as mentioned in Jonny “Dandelion” Watson’s post earlier.
The move also saw the pound and Euro shoot up against the Dollar as sterling 2.25 cents against the greenback and the single currency has enjoyed a nearly 3 cent range! This exchange rate volatility can be difficult to navigate but there are substantial profits to be made by taking advantage of the spikes. If you have a currency requirement then please feel free to call Colm on +44 1494 725 353 or e-mail email@example.com and quote ERF
Italy’s deficit is 120% of GDP. To put that in context if Italy was a person earning £100,000 a year, that person would have £120,000 worth of debt. Now imagine all the interest payments on that debt and all the normal costs that ‘person’ would have as well. Rent / Mortgage, utility bills, insurance, travel costs… the list is exhaustive. Quite a task for even the most prudent and economical in balancing this particular persons books!
Well the measures have been agreed and should be passed in their parliament today. The question is will the measures be enough to tackle this deficit? The only higher deficit in the Euro is Greece! And we know the state they are in! Italy’s scary debt scenario is not the sole reason, but certainy one of the most prominent reasons for the recent volatility on financial markets across the world. Basically the Euro stability funds cannot afford to bail them like Greece, Ireland and Portugal have been.
With a relatively quiet week on the data release front keep an eye out for the UK’s Nationwide housing data and the Conferation of Business and Industry’s trends survey, all with some potential to move the market.
Later in the week we have US and UK GDP (Gross Domestic Product) figures which will give us some insight into how the respective economies are faring. Recent indication on both sides of the Atlantic have shown major hurdles lie ahead in the recoveries, with some predicting a slip back to recession. How does this affect the Euro rate? Well any sterling strength or weakness will obviously affect the GBPEUR rate and the dollar, seen in a similair risk bracket to investors could affect the Euro rate as funds are moved in and out of the dollar.
The last two weeks have been exceptionally volatile with some daily swings of over 2 cents on the GBPEUR rate. If you have any currency transfers to make, whether it be Euro or any other currency, speak to us to find out if you could be getting a better deal. The authors of this blog are specialist FX brokers who can help both commercial and private clients manage their currency requirements in the most effective way. For a free no obligation discussion of all the issues that right now are making your exchanges more or less expensive fill in the contact form or call 00 44 1494 787458 / e-mail firstname.lastname@example.org. Please quote ‘JMW ERF’ to ensure your call / e-mail is correctly handled.
The Euro weakened dramatically at the start of the month as the world was reminded of the problems the eurozone debt crisis presents to not only Europe but the global economy. The ‘selective’ default pushed through via the ECB, IMF and eurozone finance ministers has done little to really tackle the root and cause problems. Greece has been thrown a lifeline but it cannot swim to the shore. The tremendous debt undercurrents that circle the murky waters it is treading must surely engulf not only Greece, but also those who have extended them the proverbial stick in the water.
Whether it is this month, next month, Christmas or in 2012, I cannot see how this issue won’t resurface. And what will we do when it does? I have discussed before the eurozone is inherently faulted. That by trying to manage a multitude of individual economies with one single economic policy they risk not being able to target the neccessary economic medicine each economy really needs. This could seriously hurt the euro as well as the pound and the dollar since the UK and the US have massive exposure to eurozone debt.
The euro has not recovered massively from July’s early weakness and as time goes on the crisis will surely resurface. We just don’t know what will happen at present but we can say it will be a big event when it does happen.
We are specialist currency brokers who write the blog for our clients and members of the public who have interests in the euro rate. If you have any currency exchanges why not give us a call? I have personally never had any trouble beating not only the banks but also other brokers and to that effect our firm have won awards for both our levels of customer service and perhaps more importantly our rates! Speak to me on 01494 787 458, international 00 44 1494 787458 to find out more. Alternatively e-mail me on email@example.com. Please remember to ask for me Jonny and quote eurorateforecast.com for preferential rates.
The Euro continues to fall today amid a shifting spotlight that now focuses primarily on Italy, although other struggling countries help to share the burden.
Some economists, according to the media have already began to write off Greek debt – admitting that they are extremely unlikely to pay it off and are now focussing on suring up the most indebted nation in the zone – Italy. If a Greek bailout could have very serious effects and a Spanish bailout could be monstrous then what of the Italians? Well to put it quite simply Italy have been the nation that has managed to avoid the spotlight very well of late, but it is behind only Germany and France respectively as the biggest economy in the Eurozone. Much like the tiger lurking in the bushes it poses a quiet but very, very serious threat to the euro and indeed the global economy as a whole..
Borrowing costs in Italy (along with Portugal and Ireland) hit record highs on Friday and it seems that this has had a knock on effect of concern on stress tests of Italian Banks that are due later in the week as the Euro suffers again today against both the USD and GBP. There are also murmours that the European Bailout Fund may have to be doubled in order to potentially deal with an Italian collapse. All in all it seems speculator’s faith in the EUR is being tested. We all know the classic Italian Job cliffhanger ending, did they make it?… Will they this time? Call me an optimist but I think they will at this moment in time, but this is not by any means a definite. If any of the other nations (and the others will feel the strain more seriously than the Italians are now) are forced to default then the fear is that like a chain of dominoes Spain and Italy could follow suit, with a rather resounding crash. This is the eventuality that everyone, (especially if you have your funds in Euros!) wants to avoid.
With Euro rates falling a rather staggering amount over the last few days (0.6% vs GBP today and 1.6% vs the USD), I think we are seeing a sign of things to come. Put quite simply most of the Brokers in my office have been stating that the Euro is overvalued for some time now and it seems this is something finally being realised by the markets. It is also worth noting that this European weakness proceeds an Interest Rate hike only two working days ago!
As far as a forecast goes I actually don’t think the Euro is likely to go too much further in the short term, but these fears are moving from country to country as an almost daily occurence. Even though interest rates are likely to underpin the value of the Euro somewhat I think we will see Euro rates tumble in the next few months as more and more information is revealed about what a state some European countries are in. If you are looking to exchange funds in this time, try to make sure that you have moved before this happens. If you would like a more detailed chat about your requirement for free with the author of this article then please do not hesitate to contact me by calling this number and asking for James Matthews 0044 1494 787 451.
The Euro has again strengthened against Sterling as a combination of poor UK PMI data yesterday and an apparent resolution to Greece’s current situation appears. It is not so much the details of any resolution that have calmed the market, but the fact that it is going to be dealt with one way or another. The ECB is buying more time in this nightmare scenario. All they are doing (or proposing to do) is postpone the repayment dates for many of Greece’s loans for a few more years in the hope that at that time Greece is growing and able to start paying back the debt.
There is a famous quote by Albert Einstein which I think applies here ‘Insanity: Doing the same thing over and over and expecting different results’
I cannot see how Greece can repay it’s debts and some sort of bailout or restructuring will surely have to take place again. Until that time there is a huge economic and political will to dampen the flames Greece’s economy could present to a very volatile world economy.
After the recent despair for those buying Euro with Sterling, what more could you want on a Monday than to gain back 1 cent! The Pound has fought back to take us back up to near the hallowed 1.20 level - although it is not there just yet.
Whilst only a small gain compared to the recent highs, a quick rebound from the losses suffered is important to reflect the general long-term upward trend that is forecast. The short term picture is not so clear and the length of time it takes before the Pound becomes solid enough to spark a recovery could be threatened by the UK’s austerity measures.
UK GDP figures were confirmed as many analysts predicted at 0.3%. The interesting point was that there had been a delay. It is a shame something more substantial was not realised, following such a delay. This news is not all bad and by showing the UK economy has grown in Q1, might provide an anchor from which the Pound moves up.
The EU Banks stress test results are due 23rd July. I believe this will move the market. Which direction is a hard call. All the signs appear to point to Euro strength. The banks liquidity was tested lightly two weeks ago regarding repayment of loans and the results were positive. The ECB have very much talked up the strength of the European institutions and this may be another reason for recent Euro rate strength. Further we have seen numerous measures designed to limit the effect of any default, namely with the €750 bn bailout fund. However if the markets build in this security, it will only take a couple of bad reports – which is quite likely considering over 90 banks are being tested – to instill fear and inspire a Euro sell off, leading to us see the Euro weaken further.
To find out more about how currency fluctuations will affect the exchange rates you can acheieve and to get the best deal on Euros against the pound, please fill in the contact form and one of the traders from this blog, euro rate forecast will be in touch. Thank you very much, we look forward to hearing from you.