So, following a number of negative data releases Europe is back in recession. This may not come as much of a surprise considering Spanish unemployment is at 25% and Greece as an individual nation have been in recession for the last 5 years but some analysts had thought that a powerful German economy could help keep the EU from falling back into recession but clearly even the might of Germany was not enough to protect the single currency economy from the dreaded double dip recession. While the figures are still not as bad as the recession in 2009 the fact that the recovery only lasted 3 years highlights just how difficult the situation is for the leaders of the EU nations. Personally I can not see a quick fix for this and it would not surprise me to see Europe remain in recession for the foreseeable future. The question is then; what will happen to Sterling Euro exchange rates?
With the UK having such strong trade links to Europe it is not unthinkable that any negative news from Europe will have a bad impact on the UK and therefore Sterling. It is clear that despite officially not being in recession the UK is still struggling and I would not be surprised if economists are soon talking about a triple dip recession for the UK which could be very damaging for Sterling exchange rates. Almost in order to highlight the fact that it is unlikely Sterling will have an easy run against the Euro we saw the Euro strengthen against Sterling despite the fact it was announced the EU was back in recession! It is clear that the currency markets are going to remain unpredictable while the global debt crisis continues so make sure you stay in close contact with us here at Foreign Currency Direct plc so you are in touch with the latest currency market movement.
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