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When should I buy Euros. this Friday could be key for the pound and Euro.
The Euro took a slight decline yesterday as comments from Germany’s Bundesbank stepped up criticism of a potential proposal that the European central bank will start to re buy government bonds to quell the regions debt crisis. The comments from the Bundesbank came after the German magazine Spiegel reported that the ECB is considering setting a yield cap/limit on Euro bonds and was supposedly considering buying debt issued by vulnerable countries if their interest rates rose too high.
After the report from the magazine the ECB denied the speculation about potential market intervention to contain the euro zone debt crisis, dashing recent investor enthusiasm for risk which tuned Euro negative. An ECB spokesman said it was misleading to report on decisions that still had not been taken.
Looking forward it is very difficult to decide what to make of the comments from the ECB after the magazine’s report. There is never any smoke without fire and if I was looking at buying Euros I think I would buy what I need as soon as possible. The mere mention of how the ECB will solve the debt crisis seems to be Euro positive. At some point in September the ECB are going to inform the world what their plans are. If the magazine’s report is correct then it could bring some Euro strength as it will certainly boost investor sentiment in the short term.
When should I buy my Euros?
This afternoon we have witnessed the Euro reverse yesterday’s losses with the rate gaining over 0.5% against the pound, and is up 1% against the USD. Regardless whether you are buying or selling the pound, this Friday you may wish to consider securing your currency before the National Statistics release their second revised GDP figures for Q2 of this year for the UK. Recently it has been reported that the UK economy has contracted by as much as -0.7%. The general consensus is that the markets are expecting a contraction of -0.5% slightly better than -0.7% that was recently published.
The Bank of England recently stated that they felt growth in the UK will be flat for the remainder of the year and into 2013 so I am not expecting to see a shock announcement of growth. Where you must be cautious though is if the data comes out worse than the -0.5% that is predicted. If this happens sterling could just well fall back towards the 1.25 level against the Euro as their will more than likely be a big sell off of the pound by investors.
If before the decision this Friday, you do not want to take the risk with your currency exchange you are free to secure your funds on either a spot or forward contract. This will give you the peace of mind in knowing exactly how far your funds will go while taking away the stress and hassle of future data releases. If you choose to secure your funds sooner you will be pleased to know that you are trading at close to a four year high against the Euro. If you wish to open an account or would like to speak with us about your requirement you can do this by emailing me at [email protected]. I will then contact you to go over all the options that are available to you.
To give you a quick background I have been assisting both private and corporate clients make significant savings over the banks and other brokers for years. We created this site to give you the reader a brief insight into what is happening with a specific currency pair. Hopefully you will find this site informative and if you would like to speak with me regarding your currency requirement then please feel free to email me [email protected] with your contact details and we can discuss the different options that are available to you. I can help you limit your loss to volatile currency markets through the different contracts that we offer which may just give you the peace of mind you are looking for on your all-important currency conversion.
Thank you for reading
Ben Amrany
2012-08-21 10:57:07
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