FCD Currency World Cup

Yesterday in the FCD Currency World cup it was a clear victory for the Euro over the Brazilian Real but even with this I dont think anyone was expecting the fate that fell on one of the worlds most passionate footballing nation. So, the first currency into the FCD Currency World Cup is the Euro and tonight the second semi final will decide whether it is an all Euro affair or whether the Argentinian Peso will spoil the party. The following examines the fortunes of these two currencies.

Holland – The Euro (EUR)

Yesterday the Euro managed to claw back some ground against Sterling following some worse than expected Manufacturing data for the UK and with very little data of note for the Eurozone this week we are expecting exchange rates to remain relatively steady. However, tomorrow we have the latest interest rate decision from the Bank of England (BoE) which, while unlikely to throw up any major surprises, will still be closely watched just on the off chance of any unexpected announcements. Also, tomorrow there is a monthly report from the European Central Bank (ECB) which will give an overview of how the ECB see the single currency economy and may also provide us with an insight into what the ECB are thinking in terms of further monetary policy changes such as further changes to interest rates or possibly even the introduction of Quantitative Easing. So, in what is a quiet week tomorrow may provide us with a little more movement meaning if you need to buy or sell Euros it is worth speaking to one of our senior currency brokers here at Foreign Currency Direct plc who will be happy to discuss your currency requirements and the options available to you.

Argentine Peso (ARS)

The Peso has suffered like many South American currencies with severe weakening due to the weakness of their economy and high inflation levels. In fact the Peso went from around 3 ARS to $1 in around 2008 to over 8ARS to $1 at the start of 2014 which does nothing to help the stability of the economy. With the ARS falling in value so sharply it resulted in an huge increase in Argentinian exports as the weak currency made their goods and services so much cheaper and this remains today with their agriculture industry and their vast supply of natural resources being a couple of areas that has really fuelled the export market. However, inflation if running over 10% and the economy remains only the third largest in Latin America and so there is still a lot of pressure on the Argenitine economy and further volatility is expected on the Peso.

Currently the exchange rate on the Euro to the Peso of €1 equates to 11ARS. Following last night’s shock result I don’t think we can rule out an 11-1 victory for the Euro although I am not convinced! What we can expect another exciting match tonight and it will mean we will be one step closer to finding out which currency will be victorious in the FCD Currency World Cup!