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Pressure on EUR

Pressure on EUR

The Euro weakened against both the USD and Sterling during yesterday’s trading, as, rumours and statements regarding the Euro zone debt crises sent jitters through the market. The first rumour was that Spain and Greece were likely to hold snap elections, due to the losses experienced by the ruling socialist party in the Spanish local elections, and, the inability of the Greek government to reach an agreement on further austerity measures with the opposition party. With a recent survey revealing that 80% of Greeks were against any further austerity measures, and, the recent protests seen in Spain, any snap elections may lead to a default on Greek debt and may see interest on Spanish debt rise to unsustainable levels.

Recent indications of slowing growth in the US and China, and, worries that this may impact the Euro zone growth in the second half of the year, has led to speculation, that, the ECB may not need to raise rates as quickly as previously thought, which may lead to further Euro weakness in the near term.

Yesterday, saw the release of the UK’s Q2 GDP report, which, showed that consumer spending had contracted for a second successive quarter at its worst rate since the recession. On a more positive note the trade deficit narrowed considerably with imports falling by 2.3% and exports increasing to 3.7%. With no significant news releases in the UK today, Sterling, is likely to be on the defensive as attention turns to the implications of the weak consumer spending.

The spotlight will be on the G8 meeting in Deauville today, we would expect references to FX or monetary policy to remain on the sidelines as the focus turns to the subject of the next head of the IMF although this is not formally scheduled for discussion. High on the agenda will be the formulation of strategies to respond to future crises, Euro zone debt and the need for fiscal tightening in the industrialised world.

What does this all mean for me? Well buying your EUR, USD, AUD or any other currency at the wrong time could cost you a fortune. There is no crystal ball but Currency UK can give you the information you need to make an informed decision.

Currency UK will then offer you the best exchange rates available and ensure that you subsequent international transfers are handled as quickly and as efficiently as possible.

Contact us now on +44 (0)20 7738 0777 or click here.

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