GBPEUR rates climb as bad news from Europe continue, good news for buyers, bad news for sellers (Steve Eakins)

Rates have continued to stay steady over this week even with the anticipation of a Cyprus resolution.  Many euro sellers seem to have the view that rates will fall down to more attractive levels once they do, however that is probably not the case…

This week we have seen bad news and rumours of more bad news to come from Europe in two key countries; Spain and Italy.  Italy who still don’t have a government from a failed election over a month ago is at risk of a credit rating downgrade it has been reported.  You can understand why as without a government how can they move forward with growth, plus and probably more importantly most Italians voting for parties promising no further austerity so how will their economy grow?  This weakened the euro but the news is not confirmed yet, it could be as soon as next week when the credit rating agencies confirm this and further weakness is seen for the euro.  The latest news comes from Spain where they released their 6 month update on their economy, the news comes from their Central Bank and it is not promising. They forecast a further contraction of their economy by a further 1.4% through 2013, plus unemployment to climb to 28%,  they already have the highest level which stands at 26%.  This again gives an insight into the fairly poor situation that the some of the biggest economies in the Eurozone are in, plus it makes you worry how quickly it will be mended and their economies start to grow once more. It will weakened the overall performance for the Euro both now and in the year to come, so why would the euro strengthen?

Rates are currently at a near 6 week high for buyers and low for sellers of the euro against the pound. I personally cannot see a huge swing from these levels for the near future for sellers, so even though it’s not great compared to current levels I would suggest sellers move.  Just remember that if you ignore the last 6 week, sellers you are still at the best price seen for over 12 months. Many clients that moved funds back last year would £1,000’s better off when compared to current levels…

Saying all the above, rates never move in a straight line, so there will be opportunities over the next week when rates are better for both sellers and buyers.  This is what I would suggest clients that need to move money in the near future aim for. Get yourself into a position where you can move quickly and watch the live rates. Here we offer a pro-active service helping achieve just that, so if you want us to help be your eyes and ears on market like many clients contact us today.  Call us on the normal number or email me for more information at [email protected]

On top of the pro-active service timing the trade, we have access to award winning commercial rates of exchange. So you can be happy in the knowledge that you will be saving money against other brokers and banks.

Thank you,

 

Steve Eakins

Elite Trader

[email protected]