Black Monday saw huge amounts of money wiped off global stock indices as China announced some very poor data.
With the world’s second leading economy showing bigs signs of slowing down and commodity prices hitting a 16 year low this had a devastating effect on the commodity based currencies including the Australian Dollar, New Zealand Dollar and South African Rand.
It appears as though the Euro has been used as a carry trade currency which in effect means that investors will borrow in the single currency and invest in a higher yielding currency for a better rate of return.
However, the danger is that when things move as quickly as they did yesterday this saw a massive strengthening for the Euro vs Sterling and saw its biggest daily drop in 6 years.
Today with the Chinese cutting interest rates to calm global markets this saw Sterling gain by over 1% vs the single currency and repair part of the damage seen during yesterday’s trading session.
On Friday the UK announces GDP and this could be the next catalyst for movement for Sterling vs Euro exchange rates.
If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian [email protected]