If you are one of the hundreds of thousands of people asking themselves the question “Should I sell my Euros now?” then this blog is the place for you. At the minute Europe is in turmoil, banks are having their credit ratings cut, and we have preliminary meetings of European leaders today as a precursor to next weeks “summit to save the Euro”. As such you could be forgiven for thinking maybe it would be best to get rid of your Euros as soon as possible, however if you are looking to get the best rate for selling euros then it may be worth waiting a week or two and here are my reasons why. If you are buying or selling property in Europe then the short term sterling Euro rate will be key.
Firstly, a lot of damage has already been done to the Euro through the course of April and May with the uncertainty over what would happen in the Greek elections and whether the Spanish banks would survive. Whilst these issues have not been settled in full (Greece has a coalition but lets see if it works), the markets do seem to have calmed down a bit and sterling euro exchange rates have levelled off a little. Basically investors are waiting to see if European leaders can come up with a credible plan to deal with the current crisis and bring out the big guns of the ECB to blow away fears over a Euro collapse. The Greek election result has bought them some time so it may be worth waiting to see what Merkel, Hollande, Monti & Co can come up with as it may help settle fears and see the rate move back in your favour in the short term.
Secondly, mixed data coming out of the UK at the moment makes me think Quantitative Easing is about to rear its ugly head in the UK again soon. Whilst unemployment data shows UK unemployment is falling at a time that it is rising in Europe, something that should boost the pound, there are worrying signs. Inflation is currently falling which lessens the need for an interest rate hike to control inflation (a move that would normally strengthen sterling) and gives more scope for the Bank of England to increase their Quantitative Easing program without having to worry about it’s inflationary causing side effects (QE normally weakens the currency concerned as it floods the market with cheap supply). The Bank of England Minutes showed 4 of the Bank of England’s 9 member MPC committee voted this month to increase QE, and the Bank had also flooded the UK banking system with cheap loans prior to the Greek elections in case a Syriza had triggered a financial collapse in Europe- a move that would have impacted on the stability of UK banks. The July meeting of the Bank of England rate decision could prove to be the tipping point for more QE and certainly the markets will have to price this in to a certain extent- this could create the opportunity to sell euros at a good price.
Finally UK GDP data comes out next week. This could definitely be a banana skin for sterling’s recent rise. If you are buying Euros I would be tempted to move before these announcements, but if you are selling I would be tempted to hold my nerve and utilise a good broker to watch the markets or put in a limit to buy at a particular price for you. If you are interested in these types of currency service and want an exchange rate that will beat your bank then do feel free to contact me as I work for Foreign Currency Direct. We specialise in this type of transaction for clients so if you want a bit more information about how it all works without any commitment from your part simply email me, Colm, at [email protected] and I would be happy to answer your questions. We can help you transfer euros at the best exchange rate so get in touch and find out how.