With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. The below table shows the difference in Euros you would have achieved when buying £200,000.00 during the high and low points of the past month.
|Currency Pair||% Change||Difference on £200,000|
EUR sellers continue to ride the crest of a wave, with some of the best rates in recent years against a host of major currencies. EUR/GBP rates sit close to an 8 year high, whilst the EUR has gained over 13 cents against the USD since the turn of the year. This has moved the EUR close to a two and a half year high against the greenback and has presented those clients holding the single currency, with an excellent window of opportunity to sell their positions.
With the Eurozone economy exceeding expectation in terms of its recent growth and future forecasts, many clients have been questioning whether or not to hold off on their currency exchange and wait for further improvements?
Whilst the current market remains extremely unpredictable, I’m wary about assuming that this upturn will continue at the same pace.
We do need to consider that the Eurozone is an extremely wide region, which has many economic variables. Any slowdown in its major economies such as Germany or France, will likely have a negative impact on the value of the EUR moving forward.
A prime example of the pitfalls that could potentially engulf the Eurozone, is the current Italian banking crisis. Italy’s banks currently account for almost a third of the entire Eurozone debt. This is a staggering statistic and a stark reminder that despite the current positivity surrounding the region, deep rooted issues remain. If brought to the surface, they could have an instant negative impact on the value of the Euro and the current highs could quickly be resided to the pages of history.
We also need to consider that the EUR has gained significant value against the USD but in particular Sterling, due to a complete lack of market confidence in the UK economy. This has inadvertently boosted the Euro standing and therefore you could argue that some of its current value is superficial and as such I would be protecting any EUR sell positions wherever possible.
Thank you for reading my Euro currency report, if you have any questions about Euro exchange rates I would be more than happy to discuss them – you can contact me with any queries here.
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I have used Foreign Currency Direct for three years now and would definitely recommend them. Although my currency purchases tend to be smallish my contact, Matt Vassallo is always very polite and efficient. I shall continue to use them whenever I need Forex.