With the official estimate out at 10.00 am this morning for Eurozone GDP (Gross Domestic Product) expectations are that the economy supporting the Euro grew at 0.2% in Q3 of this year. With the rate of growth shrinking this year there are fears that the countries in the Euro could be heading into recession. This release is likely to have an effect on the Euro so if you have any short term requirements do be aware of this release. To be kept up to speed with this release and it’s effects on your exchanges feel free to contact us or me personally.
In other Euro related news Standard & Poor’s the ratings agency has put on ‘credit watch’ all Eurozone members except Cyprus and Greece. The only reason Greece and Cyprus were ommitted is because they are already under credit watch by Standard & Poor’s. We saw last month Germany’s bond auction majorly undersubscribed which was one of the first signs of the crisis hitting Germany. This will come as another blow to Germany who are depserately trying to convince the world that there is a way out of the current crisis.
Thursday sees the Eurozone Interest Rate decision which could also be key in shaping the Euro rate in the coming weeks. Expectations are for a rate cut of 0.25% to 1%, which will completely undo the two rate hikes witnessed this year. The ECB’s stance of raising rates to combat inflation to me now looks out of place. How could the ECB raise rates in the face of massive debt problems by weaker nations? All it has done is raise borrowing costs and stifled growth in my opinion. Growth is really the key issues for the Eurozone, I would expect a poor showing in GDP figures this morning to really underline the need for a rate cut Thursday.
Towards the end of the week we have the crucial EU summit in Brussels between Merkozy to tackle the debt crisis. These ‘emergency’ summits are starting to sound like the boy who cried wolf, and the markets are reacting in a similair way. Italian bond yields are as high as ever and stocks and shares have still not really made recoveries from the dramatic events in the last few months.
This week will in my opinion will really set the pace for the Euro rate before the end of the month. It is not just the many events in Europe to be aware of, but also the UK Interest rate decision (will we see more QE?) and many more. If you have any Euro transactions to make (or indeed any other currencies) it is highly likely these events will cause the Euro rate to fluctuate. It is perfectly concievable we may see some further excellent buying opportunities but we could also see sudden downward movements due to these events. With rates moving every two seconds it may be in your interest to let us know of any expected requirements on the Euro so we can keep you posted on movements that will affect your transfer. We are specialist currency brokers who write this blog for the benefit of our clients, members of the public and anyone who needs to make currency transfers. We have won awards for our exchange rates and levels of customer service and have never had any trouble beating the banks and other currency sources. Why not try me to see?
If you would like to discuss further anything in the post or explore all the options available to you to maximise your exchange rate please feel free to make contact using the form or e-mail me directly on [email protected] Please quote JMW and GBPEUR in your enquiries.