Tag Archives: 1.25 GBP/EUR
Monday has seen GBP/EUR move back through 1.25, as the uncertainty surrounding the possibility of a Greek exit from the EU weighs heavily on investor’s minds. The markets did seem to be waiting for the Greek elections, before the next decisive move was made but with Europe’s woes continuing and seemingly unrelenting, the single currency may struggle to make up much ground in the short-term.
The negativity surrounding Europe is continuing to increase and for the first time publically, a major market segment has admitted putting contingency plans in place for the break-up of the euro. The chief executive of global insurance market Lloyds of London, has expressed his concerns and said they are now ‘preparing for that eventuality’ and would settle claims using multiple currencies.
This news is hardly likely to fill investors with confidence and at time of writing GBP/EUR had settled above 1.25, a level many analysts felt would provide resistance in the build-up to the Greek parliamentary elections in June. Personally, I feel a move towards 1.26 in the coming days is a possibility, as the uncertainty surrounding Greece continues to weigh heavily on the region.
If Greece were to exit the euro the results could initially be catastrophic for their economy and for the short-term fate of the single currency. The uncertainty that is surrounding the markets now will only increase and we could see euro weakness as investors run for cover. Personally I feel EU leaders will do everything in their power to keep Greece from defaulting, as it would set a dangerous president and the risk of contagion throughout the rest of Europe could be devastating.
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