The commentary is all around Euro strength at the moment but what could weaken the Euro? Well at the moment there are a number of potential hidden events that might rise in the future and cause the Euro to weaken. If you are selling Euros for pounds and rubbing your hands together expecting the rate to just improve could prove costly. Continued political certainty and a strong economy are all reason to predict further Euro strength but often on exchange rates the complete opposite can and does happen!
It is in no one’s interest, least of all the European Central Bank to see a strong Euro. To help stimulate economic growth the ECB want a weaker Euro to help drive economic recovery in the Eurozone. The strengthening Euro is potentially building up problems for a later date and the ECB will be keen to monitor this. Work of the ECB could also undermine the Euro in another sense as they embark on withdrawing their QE (Quantitative Easing) program.
When the US withdrew their QE program through the taper, the US dollar weakened as investors panicked over the outcome for financial markets. Whilst most central forecasts predict the Euro will rise, any paring back of these expectations could actually weaken the Euro. Plus any signs the QE taps will remain on longer than expected would also see the Euro weaker, there are no guaranteed outcomes on exchange rates!
All in all the going looks set to be tough for Euro buyers, but good for Euro sellers. Quick movements on the currency markets can see changes in thousands of pounds or Euro of the value of your currency exchanges. We offer a specialist view and market insight into the latest trends to help you with the timing and planning of any exchanges.
For more information and strategies relevant to your position please email me Jonathan Watson on firstname.lastname@example.org. Thank you for reading and I look forward to hearing from you.