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What can we expect on the Euro for the rest of the week? GBPEUR and EURUSD Forecast
The Euro has gained some ground on confidence we may see some kind of resolution or progress on Greece. As I said Monday I cannot see how Greece will be allowed to leave the Euro, too much is at stake for the Eurozone.
German GDP data this morning showed an economy slowing, but not in recession. The figures came in at 0.3%, versus the previous 0.5%. The longer term trend is without doubt worrying but when you compare the performance of Germany to the rest of Europe it is one of the better preformers and as the main economy in the Eurozone, this news will soothe immediate investor fears.
There has been much talk this week of the ECB capping bond spreads between Germany and peripheral nations which would of course limit the borrowing rates of indebted nations and give them an easier route to recovery. This has attracted much attention after being reported in Der Spiegel in Germany, but has been denied by the ECB.
The Euro has found support on the hope that measures are going to announced in the future to ease the debt crisis. With Dutch elections due in September as well as the outcome of the Greek Constitutional Court Ruling, there is plenty up ahead to move the markets. More worrying this week as a sign of global slowdown was the Japanese trade figures and Chinese comments all pointing to a slowdown in the East.
EURUSD – Reduced risk sentiment is driving this one. Confidence that the conditions on troubled Eurozone economies are and could be easing, coupled with the prospect of more QE in the US is driving the rate. Comfortably above 1.25 on the rate, we could easily see 1.26-1.27 tested in the coming weeks, although longer term I expect the rate to fall once focus shifts back to the the problems in Europe and the lack of credible solutions.
GBPEUR – With no sterling positive news on the immediate horizon, I expect GBPEUR to retrace steps back down through the 1.25-1.26 range in the next week. EURUSD is a very interesting pair too as the increased prospect of more QE is encouraging investors to leave the dollar, and the Euro is benefitting. The knock on effect is putting pressure on GBPEUR which could easily test the 1.2560 mark and depending on Sterling news, we could even break back down into the 1.24’s if there is particularly good news for the Euro.
Understanding what is driving and moving your exchange rate is key to getting the best price. Rates move every couple of seconds for a wide varierty of reasons. Exchange rate movements will follow a pattern, but which way they go will be determined by fundamental reasons and changes in economic policy. No one can tell you exactly what will happen, but I can help identify these trends so you can make an informed decision on what to do.
The aim of this site is to make sense of the market for anyone who wants to get a better dal on their currency exchanges. Even if it is just a one off, it is well worth speaking to us since we can potentially save you thousands of pounds by offering a better price and assistance with the actual timing of your trade.
Please feel free to speak to me, Jonathan Watson on [email protected] or call 01494 787 478. I am happy to receive any direct enquiries or answer any questions on the markets.
I hope you find this useful, Thank you
2012-08-23 03:55:05
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