The recent economic summit in Davos had its usual air of superiority and just highlights the continued widening gap between rich and poor. Nevertheless it is the businessmen and politicians who ultimately will create the jobs and provide framework for the economic conditions of our world to improve.
A key theme was future risks and there was a deep chasm between how the rest of the world views the Eurozone’s situation and how the Eurozone politicians view the situation. Many influential Western leaders including UK Chancellor George Osborne and Former US Treasury Secretary Larry Summers both pointed out that the Eurozone crisis was far from over and remained a key risk in 2014 and beyond. More recently Oli Rehn EU Economic Commissioner claimed consumer confidence was highest since 2008 and the latest PMI (Purchasing Manager’s Index) surveys, a snapshot of very recent economic activity all pointed to improvements in the Eurozone economy.
So there are without doubt things to be positive about. However in my opinion there are substantial risks and as the US economy appears to be getting on a more level footing withdrawing it’s QE programme, I do feel the Euro will weaken longer term. Unemployment remains exceptionally high in the Eurozone and there is a growing risk of deflation which is where prices are falling. This further hampers growth and can set in pace a spiral as spending falls as consumers and business believe delaying swpending their cash will means better prices.
These recent improvements in sentiment for the Eurozone are without doubt to be welcomed. But longer term we are sure to see some of the deeper problems rise to the surface which is likely to cause turmoil on financial markets. If you need to sell Euros I believe selling on the dips in your favour is the best course of action. If you need to buy or sell Euros please speak to me to find out all of the latest news that may affect your exchange and let me explain how I can get you the best rates.
For more information please contact me on firstname.lastname@example.org or call 01494 787 478 and ask to speak with Jonny