The EUR has had mixed fortunes of late and despite some better than expected growth figures in some of its key member states, has still fallen close to a one year low against the USD. What are the reasons for this after the Euro's long run of strength? We've shown in the table below the difference in Euro return you could have made when selling £200,000.00 during the high and low points of the past month, depending on the rate of exchange at the time.
|Currency Pair||% Change||Difference on £200,000|
Whilst it has performed better against the Pound, primarily due to on-going concerns about Brexit, even here it has started to see its value slip over recent days.
In truth the economic data emanating from the Eurozone has been fairly underwhelming of late and with growth forecast shrinking for the remainder of this year and into 2019, the EUR may struggle to gain any substantial value against its major counterparts over the coming weeks.
With the Euro struggling to make any inroads against the USD or even the commodity-based currencies at present, many investors will be questioning whether it may be time to sell their Euro currency positons.
It wasn’t so long ago that the Eurozone economy was moving from strength to strength but recent events have proceeded to change market conditions. In my opinion, the Euro is unlikely to benefit as a result, certainly in the foreseeable future. Trying to dissect the reasons for this change in market perception and it is clear that US President Donald Trump has played a part, ever since he introduced debilitating trade tariffs on exported Eurozone goods to the US.
Trump has made few friends inside the Eurozone of late and his restrictions have put a strain on the Eurozone economy, whilst also causing global trade to slow.
This in turn has caused investors to shy away from the Euro, which has seen its value decrease sharply as a result.
There is also now a growing concern regarding the escalating financial crisis in Turkey. Many of the larger banks & institutions inside key Eurozone economies such as France & Spain, have a huge amount of exposure to Turkish debt.
With Turkey’s currency the TRY in freefall and a deepening economic crisis, the EUR could see its value potentially decrease as a result of the Eurozone exposure and the uncertainty attached to this.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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