Tag Archives: Greek elections
Pressure on the Single Currency Continues but Concerns Over Stability of UK Economy Resurfacing
I wanted to take a moment before embarking on my next blog to thank our vast and growing reader base for all their positive comments about the site and their continued interest in our currency views. Your feedback has been invaluable and we appreciate any comments, both positive and negative, that will continue to help us impove and taylor the website specifically towards our readers needs.
Moving on and Wednesday has seen Sterling fall off against both the EUR and USD by the close of European trading and has offered a welcome opportunity for all those clients selling euro or USD. We have been continually bombarded over recent months with negativity surrounding the global economy and the sceptics amongts us will require far more than just potive words from the powers that be, before any long-term market confidence is restored.
The on-going economic struggles of multiple EU countries, particularly Greece, Spain and Italy have severely hampered the single currency and its ability to break free from its current stranglehold. It’s as if a positive statement is quickly eradictaed by two neagtive ones and anyone who follows the markets closely, ’as this particular analyst does on a daily basis’, can be forgiven for being close to despair on more than one occassion.
I suppose the million pound question has to be, which direction will the GBP/EUR currency pair take next?
In total honesty if I had the answer to that question I would probably not be writing this blog (or if I was it would in the tranquil surroundings of somewhat sunnier climbs) and the honest answer is unfortunately no one does. What we can do however is make educated guess’s and provide facts to back up our argument and that is essentially what we try and provide our readers with. We also provide market analysis and updates for over 40,000 clients, as well as provding some of the most competitive exchange rates in the country.
The way I am viewing the current economic climate in Europe is with the glass half full, which may well surprise many of you. The fact is the EU could not lose much more market confidence and with the official bailout request coming from Spain and Cyprus over the past week (it should be noted that these were both expected) I do wonder if we have almost hit rock bottom. With the annoucnement of EU leaders ’10 year vision’ to save the eurozone and the recent formation of a new Greek government, which seems to have eased some market tension, I do feel the tide is starting to turn and whilst it would be foolish to suggest that Europe’s problems are over, I do feel better times for the euro may be on the horizon.
Shifting the focus back to the UK and we already know that growth forecasts have been cut for the remainder of 2012. Further Quantitative Easing is also extremely likely over the coming months and if Mervyn King is to be believed, there are many reasons to suggest the recent highs GBP has been enjoying won’t necessarily last.
Whatever happens next it is improtant to stay up to date with the latest market movments, particularly if you have a currency transfer to initiate before the end of the year. If you would like to receive my market alerts, or have an upcoming currency transfer that you would like to discuss then please feel free to contact me directly at mtv@currencies.co.uk or on 01494 787 478.
UK Banks Downgraded as Euro Optimism Returns
Friday has witnessed a fairly static day on the markets following an otherwise volatile week. We have seen the uncertainty surrounding Greece subside, as the formation of a pro bailout, co-alition government has brought some much needed confidence back to a sceptical market. The single currency has struggled to make any inroads of late, as the high levels of debt and rising unemployment across the region have only added doubt to the long-term stability of the eurozone.
What is now becoming apparent is that leaders are now trying to provide long-term market confidence by easing fears that Greece, Spain and Italy are for want of a better phrase ‘beyond the point of no return’. It is clear that investors need to be convinced that one, the EU can find the necessary balance between austerity and growth and two, integral countires like Spain and Italy do not find themselves in a position where they default on their debts and ulitmately exit the eurozone. The major fear if this scenario were to materialise is that it will create a domino effect, that may ultimately cause the end of the EU as we know it.
Overnight news filtered out that three major UK banks had been downgraded. This announcement followed fears that further Quantitative Easing in the UK was on the cards, as falling inflation and shrinking growth forecasts were becoming too big a problem to ignore. The need for further QE has only highlighted the on-going exposue we have to the economic problems in Europe and once the news is digested I do feel we will see GBP fall off against the EUR.
If you have an upcoming currency requirement or would like to eb kept up to date with all the latest market movements, then please feel free to contact me directly at mtv@currencies.co.uk or on 01494 787 478.
Greek elections and EURO update
As many readers will be aware the Greek election took place yesterday evening and the votes have now been counted. It would seem that the party shouting for a stop to austerity, which are the risk for most, have missed their chance. There is still no outstanding winner so a coalition will need to be made in the coming week but it has definitely elevated the short term concern of the euro failing. Initially this helped the euro gain sharply first thing but the markets seem to have now turned their backs and the gains seen have been lost. Markets seem to still be hugely concerned about the euro but the focus has changed to the other side of Europe, i.e. Spain.
On the bond markets costs still are climbing across Europe ansd this morning costs pushed up for Spain, Italy and surprisingly Germany. Spain is still over 7%, Italy over 6% and Germany over 1.5%. (Check out this blog for more information as to why this is so important.) It shows to me that the markets are still worried and that more needs to be done by the ECB to introduce some confidence. This is a story that will continue to run so if you need funds in the next few weeks make sure you are a regular reader.
In other news, we have the following data releases. (To find out why this changes the market feel free to re-read the following blog.)
Tuesday
- G20 meeting – Staring tomorrow – Grade 3 – Could change things dramatically
- 9:30 UK Consumer figures – Grade 2 – Expected to fall – Sterling weakens expected
Wednesday
- 9:30 UK Bank of England Minutes – Grade 2 – Concern as could surprise the market with a wild reaction
- 9:30 UK unemployment – Grade 2 – Expected to climb – Sterling weakness expected
Thursday
- 9:00 European Purchase Management figures – Grade 2 – Expected to fall – Euro weakens expected
- 9:30 UK Retails Sales – Grade 3 – Forecasts not announced yet – come back on Wednesday or call 01494 787 478 for more info
With all this in mind I personally would expect GBPEUR to continue to be very volatile, especially with the G20 taking place this week.
If you have been waiting for the elusive 1.25 to return I would imagine you are walking on a tight rope. To get up to date information on your situation from a currency expect feel free to contact us using the form on the page, calling directly on 01494 787478 or emailing me at hse@currencies.co.uk
What now for the Euro? The New Democracy Party (pro Austerity) is in pole position to lead the country forward
It is late on Sunday night here in the UK, there would have been many of you looking on at events in Greece this evening wondering what to make of what has happened in Athens and what it all means for your currency exchange and the Euro going forward from here.
With more than half of Sunday’s votes counted, the centre-right New Democracy Party had 30.1 per cent of the vote in Greece’s second general election in six weeks. That put it about 3.5 per cent ahead of Syriza, a left-wing party that intended to pull out of Greece’s agreements with the EU regarding the country’s debts and drastic spending cuts.
“Greeks have voted to remain in the Euro-zone,” New Democracy leader Antonis Samaris said late Sunday in a televised address. “There will be no doubt about the position of Greece in Europe. There will be no further adventures. This is an important moment for Greece and the rest of Europe. Greece will honour its obligations.”
So if things go to plan Greece will remain in the Euro-zone after Sunday’s parliamentary elections appeared to give a pro-euro, pro-bailout party enough seats in parliament to create a coalition to deal with the southern European nation’s crippling debts.
The result should provide a measure of relief to the European Union and help calm volatile international markets, although the continent’s debt crisis is likely to continue and possibly worsen in the coming months.
I feel going forward that we will see a very brief spike for the Euro over the next day or so. However if you are hoping for the Euro to gain 5-6% on the back of these elections I think you may be disappointed.
The EU and the International Monetary Fund want Greece to carry out the terms of a stiff austerity program that it agreed to in return for billions of Euros in emergency financial assistance. While stating that it would honour this commitment, New Democracy also has indicated its wants the process slowed down. German Chancellor Angela Merkel though indicated she was prepared to consider giving Greece more time to gets its house in order, although she has refused to discuss watering down the agreement.
There are still many questions to be answered and this will leave much uncertainty for global financial markets. The uncertainty is what should make you very cautious over the coming weeks if you have a Euro exchange to make. If you are buying or selling the Euro and if you are at trading levels that you feel are acceptable I would recommend forward buying or trading on spot to make sure you do not get caught out by volatile exchange rate fluctuations after all it is still very hard to call what lays around the corner for the EURO.
If you have a currency exchange to buy or sell any of the major currencies events in Europe will have an effect on your currency conversion. If you would like to speak with me about your own requirement I will be happy to discuss what the implications of Europe can have on your exchange. We offer a very bespoke and personal service while achieving significantly better rates than that of your high street bank. Please do email me at bma@currencies.co.uk and I will contact you to discuss the options that are available to you.
Ben Amrany
1.25 on GBP/EUR as Potential Greek exit Leaves Markets Anxious
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.
If you would like to be kept up to date with all the latest market movements or have an upcoming currency requirement you would like to discuss, then please feel free to contact me directly at mtv@currencies.co.uk or on 01494 787 478.
