It has been agreed that Spain will be lent €30bn this month to help recapitalise its bank which is the first installment of the €100bn bank bailout that was agreed last month. The expectation is that the payment will be made at the end of July once all the EU parliments have agreed on the payment. It is also expected that the deadline for Spain to cut its budget deficit to the EU limit of 3% will be extended by a further year to 2014. Many analysts have stated that this extension is just a default but in a different name and for me it is hard to see how this is not a default. The deadline has been extended because the EU finance ministers believe Spain would not be able to reduce its deficit in time and then would officially default which could have major negative implications for the whole of the EU and Euro exchange rates. Following this news Sterling Euro exchange rates continued to sit at the current 4 year high presenting some excellent opportunities to buy Euros.

News from the UK this morning has shown that Marks and Spencer has reported a fall in their sales as the wet “Summer” weather hit their retail figures. Often seen as one of the most important companies on the UK High Street any fall in sales at M&S often preceed weak retail figures for the UK economy as a whole so this news could be damaging for the UK and Sterling exchange rates although I expect to see the problems in Europe remain in the headlines and be the driving factor in the currency market for the forseable future.

If you need to send money abroad and are looking for the best exchange rates make sure you speak to one of our experienced currency brokers here at Foreign Currency Direct so they can discuss your requirements and all the options available to you. These options include a forward contract where you can fix your exchange rate for a period in the future using just a small deposit which means you can make the most of the current 4 year high even if you do not need the currency immediately and it also allows clients to budget. For more information you can call straight through to one of our experienced currency brokers for free on 0800 328 5884 or email us on