Yesterday credit rating agency Standard and Poor put all European members on a negative credit watch. This news could have a negative impact on the Euro because if economies such as Germany are downgraded it will make it more expensive for them to borrow money and therefore more challenging for them to help bail out the smaller and more troubled economies such as Greece. This news was not well received in Europe as these comments make any sort of recovery more difficult. Yesterday Sarkozy and Merkel also met and devised a new treaty, the main point being there will be no more Greek style write offs. In other words should a country in Europe fall into debt they will have to pay it off rather than allowing the Eurozone to write it off. There is still a long way for this story to run and as it does continue it would not be suprising to see the currency exchange rates remain volatile.
In the UK all eyes are on the Bank of England on Thursday to see whether they will increase Quantitative Easing, there are currently a lot of rumours stating that there is a high chance of this happening. As previously mentioned on this blog previous announcements of QE have seen Sterling weaken so if you do need to buy currency it may be worth speaking to one of our experienced currency brokers before Thursday. Call us today on 0800 328 5884 or email email@example.com