Tag Archives: euro weaknes
Euro Bailout package lends support to Euro exchange rates
Yesterday the pound weakened against the Euro in the morning’s session hovering at a years low against the Euro due to a major Euro-zone bailout deal, which should ensure the EU is capable of bailing out any other member states beyond Greece and Ireland that require assistance.
This trend has continued this morning with the pound trading at 1.1540.
EU leaders agreed to increase the lending capacity of the European Financial Stability Facility to the full 440 billion Euros from around 250 billion, and enable the fund to buy the government debt of distressed member states.
This current bailout package will increase investor confidence that the EU can sort out any financial crisis that may occur in the future. If you couple this with the expectation that the ECB may raise interest rates next month then we could see GBP/EUR rates hovering around 1.12 or 0.89p in the coming weeks.
Sterling strength Euro weakness – Why is it happening? How long will it last?
Good afternoon and sorry for the lack of posts lately….. with the GBP – EUR rates breaching the 1.20 mark and staying over and above it the other traders and I have been rushed off our feet with those looking to lock into rates and make that dream purchase abroad a little cheaper.
So, why has the Pound gained so much?
Against the Euro it has been more a case of Euro weakness than Sterling strength as the Greek problem still hangs around like a grey cloud and Spain appear to be following suit with rapid pace along with numerous other economies.
This in turn creates one huge problem….. With only one set of fiscal policies just where do the European Central Bank turn next? Obviously this has led to low confidence in the Euro Zone and whispers of the Euro not even existing going forward.
My personal opinion is that the Pound may well creep up a little more in the coming weeks as more and more cracks appear in Europe and the Pound just subtly continues creeping up.
Against the Australian Dollar the great recovery appears mainly down to the fear of a hung Parliament over there – remember what tht did to the Pound???
The election is not for months so should this become even more of a possibility then expect the Pound to make further gains against the AUD.
Sterling has seen large gains against the SEK,DKK,ZAR and numerous other currencies whilst staying reasonably flat against the Dollar and making slight losses against the CAD.
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