One potential lifeline for Euro buyers and a huge potential banana skin for Euro sellers is the Greek debt problem, which is starting to creep back into the news again, which is no great surprise.
The Greek debt crisis really caused the Euro issues and weakened it significantly and with £6 Billion to pay to creditors in July we may see the temperature start to rise for the Euro as we enter the summer months.
Public debt in Greece is now predicted to reach a staggering 181% of their GDP (Gross Domestic Product) figures this year and that quite frankly is unsustainable.
Gross Domestic Product is essentially the income a country generates, so if Greece were a person, they would have debts of over double their yearly salary over tax, all of which have interest mounting up on them at a faster pace than they can be paid off, as I am sure you can imagine at some point we will see the final straw break the camels back.
Do not be reliant on this if you are due to be buying a large sum of Euros at some point this year though as the Eurozone are possibly the best at sweeping these type of issues under the carpet or ‘kicking the football further down the road’ so there may be another resolution put in place as the year progresses to further delay the inevitable.
We have a fairly quiet week ahead for economic data across the board, let alone in Europe but there are a few potential releases of interest over the course of this week.
On Tuesday, right through from 07:45am until 9:00am we have a flurry of data, inclusive of services, manufacturing and some inflation data for the Eurozone, no great surprises are expected but do keep an eye on the market during these times.
On Wednesday, we have inflation data out at 10:00am with no major changes expected and for the key figure to remain at 1.8%, any changes to this may lead to movements for the Euro.
Later, on Wednesday evening we have the Federal Reserve meeting minutes in the States. Janet Yellen, head of the Fed had indicated we may see another interest rate hike in March recently. If this is backed up in the Fed minutes then the Euro may weaken a little on Wednesday night as EUR/USD is the most traded currency pairing in the world and with a potential hike seen as positive for the USD we may see a large volume of money leave the Euro to head off to the US Dollar.
To keep up to date with the latest economic and political trends that may affect Euro exchange rates, call our trading floor on 01494 725 353 or email me at firstname.lastname@example.org and Ill be happy to reply personally.
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