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Why is the EUR Losing Ground Again?
Just as the EUR looked to be finding some steady ground following months of instability, the tide once again seems to be turning against the single currency. For all of those readers needing to make a EUR transfer it is important to take a step back, as on the surface it is beginning to feel like the never ending merry-go-round. Just as it seems things are picking up, they drop off and just as it seems hope is lost, the EUR bounces back. To be quite honest investors and ultimately the markets have lost a lot of confidence in the eurozone and their leaders ability to provide any real long-term solutions.
But what about ECB president Mario Draghi’s recent commitment to the region, with his scheme for unlimited bong buying you may ask? Yes, this did bring back some initial market confidence but at that point the EUR was struggling to move away from its four year low against GBP (1.2860) and its recent low against the USD (1.2099). The truth is it is going to be a long-road to recovery and quite understandably that road to recovery will be met with some speed bumps. For those unsure of when the right time is to initate their currency transfer, there are a few factors to consider.
If you have an upcoming EUR/GBP transfer you need to try and look into the relative state of each economy, as the UK is still struggling to pull itself out of recession despite last weeks better than expected retail sale figures and unemployment figures. UK leaders will also want to control any major positive movement for GBP against the EUR, as our trade deficit is the widest since records began and a strong currency will only weaken our hand, by further alienating our largest trading partner (the EU). For this reason I do not see GBP/EUR levels moving back towards the recent four year highs but will instead continue to find some resistance around 1.25, whilst the markets wait in anticipation of the next major shift for the currency pair.
For all those with an upcoming EUR/USD transfer it is important to remember that the EUR has in fact gained over 9 cents in the past couple of months, a spike that will gain you an extra $8,000 on a 100,000 EUR/USD transfer. With the on-going political uncertainty in the US, coupled with the recent injection of QE3 it is not unreasonable to think that the EUR could break back through 1.30, although with the greenback seen as a relative safe-haven currency its movements are not always easy to predict.
This market uncertainty can be difficult to digest, especially if you have an upcoming property purchase or sale and are looking to transfer funds but are worried that market movements will ultimately leave you short changed. Here at
Foreign Currency Direct plc we have multiple contract types all tailored specifically towards our clients needs. One of our most popular types is our forward contract, which allows you to lock in an exchange rate even if you do
not have the full funds available. This is perfect for anyone looking to eliminate risk from the market but still take advantage of our award winning rates. If you would like more information please contact me directly at [email protected] or on 01494 787 478.
2012-09-24 22:40:53
Source: http://www.eurorateforecast.com/2012/09/24/why-is-the-eur-losing-ground-again/
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