Daily Archives: December 2, 2011
Is this time to look at selling Euros? Will the Euro survive? Shall I sell My Euros? These are all questions I am now being asked on a daily basis… Here is my personal take on things
Yet another week goes by and once again Euro news has been in the headlines… Yes for sure there is just so much trouble within Europe and without a doubt 2012 will see some changes that have never been seen before but I cannot see that even if there is a decision to dissolve the Euro it will be done at a great pace.
When a country has moved to join the Euro in the past, it takes months and years for the powers that be to track exchange rates between the two currencies and to decide on a correct and fair level to peg the currencies at, this is why we always know well in advance that a country is going to join, yet have no idea what the pegged level will be.
In my opinion this matter alone will keep a potential break up from happening for a long time as ministers and members within Europe will not be able to just decide on exchange rates for Germany, Greece, Italy and so on overnight, it will take a huge amount of work and a lot of arguments to come up with a result that is fair for all.
Regarding selling Euros, if you are currently holding funds in Euros then I would start to become very tempted to look at converting your money back into whichever currency you will eventually need them in. There is indeed no smoke without fire, I am aware that the Euro has indeeed been on the ropes for the last few years now and managed to stay on its feet, however on pretty much a daily basis something new is in the papers, another summit is announced to find a solution to the problems or more money is injected into particular economies or funds to keep things afloat.
Sterling Euros rates have been stuck in the same range of 1.1550 to 1.1770 for the past few weeks and I believe investors are sitting back awaiting the next piece of large news – more than likely although the U.K has plenty of problems this will be something negative for the Euto that tips the balance slightly… Of course anything can happen so I may be wrong, but I feel the Euro at the moment is a ticking timebomb and everything could hit the fan at any moment over the next few months.
If you are worried about what to do I can assist you, not only by getting you the best rate of exchange when you convert your Euros but with a number of tools we have available in the market inclusive of Forward contracts (locking in to a rate of exchange for anything up to two years in advance – ideal for pending property sales and businesses) stop loss and limit orders, tools allowing you to aim at a particular rate or set a worst case scenario rate with these automatic triggers that work 24 hours a day 7 days a week at no extra cost to you.
Should you want a further explanation on how these work, or indeed want to discuss a potential transfer for you or your company (bank to bank transfers only) then do feel free to contact me, the owner and main writer on this site - Daniel Wright on djw@currencies.co.uk and I shall be more than happy to assist you with whatever your requirements are.
The affects that Europe has on all global currencies.
We have worryingly seen a big decline in the value of sterling exchange rates over the course of this week with losses against the USD, AUD, NZD and CAD.
Regardless of the currency that you require converting events in the Eurozone are having an effect on all of the 16 most major traded currencies. You may think that because you require making a currency exchange that does not involve the Euro you don’t have to worry about what is happening there. If this is your line of thought then you could not be further from the truth.
From the USD & CAD to the AUD, NZD & ZAR events inEuropeare having huge implications on the movements of all currencies. I feel we are starting to see a trend occur in connection with investor confidence surrounding Europe which can strengthen or weaken a currency by a good few percent in a day or two. In a nut shell the trend seems to be as follows for sterling exchange rates:
Confidence in Europe and the global economy- Enhances risk appetite for investors
↑GBP v USD (Sell off of Dollars)
↓ GBP v AUD, NZD, ZAR (more demand)
No Confidence in Europe and the global economy- Causes investors to look for the safe havens)
↑ GBP v AUD, NZD, ZAR (Sell off of currencies)
↓ GBP v USD (more demand)
Recently the pound has seen a 4-5% movement against the southern hemisphere currencies all on the back of investor confidence. It shows that when you feel the pound is heading in the right direction all of a sudden events in Europe can cause so much uncertainty and make investors rethink their positions which moves the rates of exchange very quickly.
I will be happy to speak with you in more detail to fully explain the affects of Europe on your currency exchange. Please email me with the details of your requirement at bma@currencies.co.uk and I will call you to discuss the outlook for your requirement and the options that are available to you.
Sarkozy addresses the nation to try and get all European countries moving forward together.
There have been more and more rumours that the end of the Euro is near. Last night the French president Sarkozy gave a speech stating that the Euro could not continue unless all 17 nations pull together by preparing their budgets in common, narrow competitiveness gaps and face tougher automatic penalties for rule breaking.
The French want the European Central bank to become the lender of last resort as this will help their credit rating but Germany do not seem keen on this idea as they know deep down that even a central bank cant keep throwing money at a country that is bankrupt. With borrowing costs rocketing for countries like Italy and Greece I think it is inevitable that we will see a break up of the Eurozone as throwing more funds at the problem is not resolving the issues. It may come to a stage where a break up will be seen as positive for the global economy and the sooner this happens the world can move on from this debacle.
He said that he would meet with German Chancellor Angela Merkel on Monday to discuss steps to ensure the euro is saved. It will be interesting to see how the markets react to his comments and if Germany and France can finally come up with a resolution. With the pound over a cent away from the recent highs we could see sterling move back down to the lows that we saw at the beginning of November. Please email me at bma@currencies.co.uk so we can discuss any future requirements you may have and what implications may be around the corner.
