With the Euro at a 16 month low against the pound, many of you will be asking whether to buy Euros now or wait to see if it weakens further? Much will depend on what the ECB do tomorrow – another rate could see the Euro drift further – and whether or not Merkel, Sarkozy, Central Bankers, and other European chiefs can provide some serious detail on how to tackle the debt crisis rather than more grand rhetoric (as they say the devil is in the detail!).
At the same time it seems unlikely that the Bank Of England will extend the Quantitative Easing program (a move which could seriously weaken the pound) given that all 9 of its Monetary Policy Committee voted against only last month as it would be too big a sea-change. They are more likely to take a wait and see approach however the threat of QE is still a real possibility in the months to come given the level of weakness in the UK economy at present. If GDP figures towards the end of this month are very weak then sterling’s fortunes may reverse sharply. Many believe the B of E have a hidden agenda to keep the pound weak to help UK exports (whilst this is against EU rules and denied publically by Mervyn King and others) and last time sterling made a sustained break above 1.20 in the summer of 2010, the mere suggestion of QE by policy makers caused the pound to crash through September and October.
As such I would be inclined to buy sooner rather than later as whilst I don’t see an imminent solution to all Europe’s ills, or the Bank of England implementing QE on Thursday, I think they are definite possibilities to guard against in the months ahead. If you are looking at buying Euros then please feel free to e-mail firstname.lastname@example.org quoting ERF and see if we cannot source you a better level than your existing currency provider and save you money.