My clients continue to ask me just what will happen to the Pound against the Euro and in truth, like major analysts worldwide and the majority of people if I am completely honest you just cannot be completely sure.
What you shoud be doing in this current market is looking at it from an investors point of view, why would you look to invest in either?
The Euro Zone has plenty of problems, and I am still of the opinion that at some point (could be weeks, months or even years the way things are going) something is really going to blow up within the European economies, we have seen signs of it and clearly that things are bad… but there is certainly room for them to get a whole lot worse.
Everything that the European Central Bank are throwing at the problem appears to be a short term fix, and when they run out of options I am sure we will see failures and the Euro weakening considerably as a result. This would stop me being that interested in the Euro as you never know quite when this will happen.
On the plus side for the Eurozone, they have raised interest rates twice this year, an interest rate rise is generally seen as positive for the currency concerned and a cut negative, so this has made the Euro more attractive to investors and in my opinion is the main reason it has kept strong, along with the Chinese and Swiss purchasing large amounts to up reserves and davalue their currency respectively
The U.K on the other hand has not even considered raising rates this year, and may not next year if inflation continues to naturally drop away- this will hold the Pound back in the short term I am sure of that.
What does not help is data releases in the U.K being fairly poor, our Misery Index (inflation times unemployment) being at the highest point in 17 years and our own people deciding to smash their own home towns and cities up just a few weeks ago… the cost for this further down the line will be huge and will surely effect the strength of future economic releases.
My overall opinion is that this pairing will continue to stay in this range as they battle to be best of a bad bunch with the Dollar, what you need to do if you are buying is wait for a small spike in the market and jump on it, before rates get a chance to go back down again.
I can help you save money either way when you do want to buy or sell currency, along with offering fantastic customer service, contact me today [email protected] or fill in the enquiry form on this page.