With the best buying rates on the Euro in nearly four years many are asking if it is the start of a long term shift on the currency pair.
On the one hand political problems within the Euro zone are dominating news headlines worldwide. The impact of the austerity measures are taking the limelight with France, Holland, Greece and the UK becoming increasingly wary of the stunted growth and increasing budget deficit it is causing. In the last week we have also seen Beppe Grillo, an Italian comedian make significant gains in local elections. He is opposed to the austerity measures which serves well to highlight that voters throughout the union are adamant to see some kind of change.
Whilst I think problems in the Euro zone have not quite as of yet peaked they will get better in the next year. We have seen Greece and other ailing states within the zone come closer to the brink but they have always bounced back. The collapse of the Single Currency or the zone itself would cause the worst financial Armageddon of a generation and hence the reason why the IMF continues to post record breaking funds to rectify the problem. The European Commissioner for Economic and Monetary Affairs Olli Rehn has even suggested that “recovery is in sight” which could be the start of some much needed confidence in the market.
Furthermore, the UK is certainly far from perfect but is rather the lesser of two evils. With Clinton Cards, Peacocks and Game alone posting 25,000 job losses the future productivity of the UK is called into question. Our national output is already 4% less than it was four years ago but prices have risen 15% throughout the period. This will certainly be increasingly problematic to Pound-Euro exchange rates in the coming months so make sure you speak to a currency broker today about the different contract types that can help mitigate these risks.