Terror attacks heighten the political uncertainty

Last night’s brutal truck attack in Germany has so far claimed 12 deaths and injured scores more. Our thoughts and prayers are with those affected. Bearing all the hallmarks of a terrorist attack it has weakened the Euro which is down against the dollar and Sterling as markets are reminded of some of the challenges countries and politicians may find in 2017. Germany is the Eurozone’s largest economy and Chancellor Angela Merkel the main actress in all wider European affairs.

With elections next year in France and Germany this event will be debated and assessed for its impact on such affairs as we get closer to those events in 2017.

EUR/USD has retested levels not seen since 2003 this morning as the US dollar strengthens over these concerns. This has weakened the Euro slightly against Sterling and highlights the uncertain nature of global events and exchange rates. If you have any transfers planned buying or selling Euros in the coming weeks and months then make sure you highlight any situations or plans to your account manager to ensure we can highlight any sudden changes in your price.

Will Pound to Euro exchange rates hit 1.20 again?

December has been the best month to buy Euros since July with GBP/EUR trading over 1.20. With the Italian Referendum and the ECB (European Central Bank) having contributed to weakening the Euro as we predicted there is less expected immediately on the horizon to weaken the Euro. Another terrorist attack would be an exception to this. I feel the risk now is GBP/EUR moves lower as we approach the end of the year and early 2017. March 2017 and beyond could be tougher for the Euro however as the French election and other news begins to weigh on the single currency. It is however tricky to foresee just how Sterling will be performing at this time, much depends on the outcome of the Supreme Court decision.

French elections are not until April and German elections are in the Autumn. Therefore whilst I would expect the Euro to come under pressure later in 2017 it might be that if you have a requirement in the early part of next year locking in these values makes sense. If you are buying €200,000 today it costs £15,500 less than it did during the lows of October. Thinner trading volumes at this time of year could see unexpected swings so 1.20 shouldn’t be ruled out. The best way to ensure you can trade at whatever levels you wish are to keep in touch with our experienced and knowledgeable team who will be more than happy to help explain what is happening and watch the markets for you.

Call us today on 01494 725 353 if you have an upcoming transfer that youd like to discuss in more detail. A number of political events early next year could impact your buying requirement. Alternatively, you can email me directly at jmw@currencies.co.uk, and Id be happy to assist you with any questions.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.