The European elections next year could cause further turmoil in Europe following the UKs vote to leave the EU.
Christine Lagarde, the Managing Director of the International Monetary Fund issued another stark warning to world leaders at the G-20 summit over the weekend. She warned that all major economies must use all available economic and financial tools to counter global growth, and that growth must be more inclusive and benefitting of all people at a time when the world is seeing a backlash against international trade and globalisation.
When reading this update, I couldn’t help but think she’s alluding to the political divisions and return to populism from many in European politics, and with Germany and France both set to have general elections next year it’s likely that the IMF have this in mind, and consider them a risk just like the UK’s EU referendum this year.
It’s worth noting that another IMF downgrade would make this year’s global growth rate the slowest since the financial crisis in 2009, and I think that the Pound could benefit if global uncertainty increases as much of the ‘Brexit’ uncertainty has already been priced into the currency, therefore the knock-on effects won’t be as dramatic.
On the subject of political elections, German Chancellor Angela Merkel received a substantial blow over the weekend as her ruling CDU political party was beaten by Germany’s Far-Right Alternative fuer Deutschland (AfD) in her own constituency, and it’s fair to say this is a direct result of her immigration policy as AfD are stanchly opposed to her polices.
If this is an indication of things to come, I expect major headwinds to come for the Euros value, and I think those looking to repatriate may be wise to secure their currency around the current 3 year highs as they may not be around for much longer. If you wish to book todays rates but don’t have the full amount you wish to convert available, contact us to discuss how a forward contract could benefit you.
This week’s major economic announcement is likely to come out later today. At 10am Eurozone GDP (year on year) will be released reflecting the 2nd quarter of this year with 0.3% the expectation. Expect any sways from this figure to effect the Euros value and feel free to get in contact if you wish to discuss trading around this potentially volatile news release.
For more information on how next years European elections could impact your Euro requirements, call our traders today on 01494 725 353.
My experience with Foreign Currency Direct has been excellent, and my account Manager Joseph Wright has been First Class. He has provided me with all the information that I needed, in a very clear way, that made it easy to understand.
Successful transfer to France. I have used Foreign Currency Direct several times. Nothing is too much trouble to explain, and when it comes to the actual transfer, it takes place on time without fuss. Never had a problem. Thank you Joseph!
Very efficient and responsive. We had great service from Joe Wright who helped us (patiently and with humour) through our currency purchase and was then able to guide us through the process of sending money to France for our property purchase.
Joseph treated us very professionally as well as friendly, and advised and went beyond his duty. Would recommend and use him again.