Sterling Euro Latest Forecast – Will the Dollar be the main beneficiary?

GBP EUR Drops After GDP Misses BoE’s 5% Target

The Euro will remain the main talking point for weeks and months to come. Bond markets are showing extreme stress which is usually the first sign of a crisis. The problem is that it this is all unprecedented and I do not believe anyone actually knows what to do. We have elections up and coming in the next few weeks across some of the most noted economies in trouble which could lead to absolutely anything.

In fact, last night on the BBC news a 5 minute report on Spain and the problems there suggests that they may be next to step in line for a bailout – A record 66 Billion Euros was taken out of Spanish banks by citizens and investors in March, the highest since records began. Along with this there were anti austerity riots in the streets and many protests across the country. Spain still stand tall and say they do not want a
bailout and should not need one… but so did Greece… and Ireland and Portugal just before they got one. Just how much money does the IMF have left?

My personal thought is that I do not feel Sterling will fly much higher against the Euro unless something absolutely huge comes out that is Euro negative. Even when we do see bad news for the Euro it brings further worries to the U.K and indeed the pound as we are vastly exposed to European problems too, the main benefactor in all of this (as it has been in the last few weeks) will more than likely be the Dollar.