Shares in one of Spain’s largest banks, Bankia, have been suspended following the news the bank will be asking for a bailout from the Spanish Government – reportedly for the amount of €15 billion. With Spain under major economic pressure and currently in recession it will be interesting to see whether the Government can afford this bailout, but as they already own a 45% stake in the bank it is unlikely they will not provide the necessary funding. While Greece has been dominating the headlines the problems in Spain could easily eclipse the Greeks. With a much larger economy that would need significant financial support from other Euro member states and the IMF if their economy was to reach the same level of Greece’s that may be hard to provide and with about a quarter of the population unemployed and with a stagnant housing market it is hard to see where a recovery will come from.
While the outlook for Europe’s economy seems bleak it is important to remember that the UK’s largest trade partner is the single currency economy and so any negative news for Europe could result in Pound Sterling weakness. So, while the rates of exchange for Sterling Euro exchange rates are close to the highest levels we have seen for 4 years it could be an excellent opportunity for buying Euros.
If you are looking for the great exchange rates and would like to discuss the currency market outlook in more detail speak to one of our knowledgeable currency brokers by calling us free on 0800 328 5884 or email firstname.lastname@example.org.