With political uncertainty surrounding Greece and the future of the Euro zone fueling headlines worldwide it is a good time to be watching Sterling-Euro exchange rates. Yesterday saw the latest attempt to breach the highs we saw leading up to the recession in 2008 with rates creeping up to the 1.2555 mark. But with the “political paralysis” in Greece, are we likely to see the 3.5 year run against the Euro continue?
On the one had there is an interesting and compelling case to look at a Greece exit as beneficial to the Euro zone. We may, for instance, only ever be as strong as our weakest link and under such logic Greece can surely only limit the future of the Single Currency. It is also draining much needed IMF bailout funds that could perhaps be put to better use elsewhere.
Unfortunately in reality the problems go deeper than this and the gravitas of a Greek exit would be severe. First and foremost investors will be forced to ask “Who is next?” – a hugely important question with Spain, Italy and (to a lesser extent) the Netherlands all falling deeper and deeper into the economic abyss. Foreign investors, residents and tourists will be increasingly reluctant to store assets of any kind within the Euro zone and will understandably travel further abroad for their investments.
If you are worried about the state of the European economy and would like an update please feel free to drop me an email on firstname.lastname@example.org or speak to your broker on 0800 328 5884. Likewise if you have assets in the EU and are concerned things are going to get worse feel free to enquire about the possibillity of a forward contract and mitigate any risks and uncertainty tied to your transfer.