The Euro - Fails To Impress

What is likely to happen in the currency markets this week? This week was meant to be all about the Euro…and potentially promised something of a boost. The first ever stress tests were completed on European banks and the results announced late on Friday. Market reaction to the stress test results however has not affected the Euro in a significant way so far. Whilst European Governments were hoping that the tests would shore up confidence in the Euro region most currency investors have decided that the tests themselves were flawed and not rigorous enough as only seven of the ninety-one banks tested failed the tests. The Pound rate against the Euro is still doing well therefore if you are UK based any trading with Europe or buying any private investments. The best move for any Euro transfers is to speak with a currency broker to get the best rates and decide whether to fix a rate in advance. It’s not actually all bad news for the Euro however as economic news in the US seems to be forging a never ending stream of gloom that’s hard to compete with. At the end of the second quarter the mood is still very much that the pace of the US recovery has significantly slowed causing economists to begin looking at whether a double dip recession is possible – and the Dollar is suffering because of this. Reports this week out in the US are expected to confirm that consumer spending has slowed and the trade deficit has swelled – GDP figures for the US due to be released on Friday are also likely to impact on the currency. The good news is that if you are based in the UK and investing in American property, this is a great time to take advantage of a weakening Dollar and a strengthening Pound. The Pound is in fact sitting pretty in between the current cross-fire of movement between the Euro and the US Dollar. As both economies are currently subject to scrutiny and investors are showing themselves to be wary of either currency, the Pound is soaking up some of the surplus. This has been further helped along by a pleasant surprise in the UK in terms of the most recent economic news. Most of all, GDP figures released on Friday absolutely soared through economists’ predictions of 0.6 percent coming at 1.1 percent showing strong signs that the UK recovery is gathering pace. If you are UK based and buying foreign currency therefore this is a great time to make the transfer. If on the other hand you are bringing money back into Sterling it may be a case of working out how to minimise your losses before things get any worse. Speak with your dedicated Currency Solutions broker about how to manage your currency transfers in the current climate.