Debt Issues Creep Up On The Euro

Following the Euro’s slight decline at the end of last week, the theme has continued with rumours that Greek debt will need restructuring adding to concerns created by the credit downgrade on Ireland. This has allowed Sterling and the Dollar to claw back some ground on the Euro, although it is still showing its weakness following last week’s lower than expected inflation figure. Speak to your broker to get a free quote on your transfer or register an enquiry online. We charge no transfer fees for amounts above £10,000 and we are happy to answer any of your questions.

Pound Sterling – UK Markets

The Pound has moved higher against the Euro over the weekend as rumours about Greek debt restructuring surface, however it has fallen against the Dollar as markets are pricing out the possibility that an interest rate rise could come to the States next month. Last week’s lower than expected inflation figure is still weighing on Sterling and in particular causing most predictions for an interest rate rise to now be pushed back until October or November. The Bank of England minutes on Wednesday are the first piece of significant UK data to arrive this week.

US Dollar – US Markets

The Dollar has managed to move up on Sterling and the Euro with strong data in the areas of consumer sentiment and industrial production on Friday afternoon putting the Dollar in a stronger position to start the week. This data allowed the US currency to take advantage of weakness in the Euro stemming from the comments made about Greek debt restructuring. US housing starts data is due out tomorrow followed by mortgage applications and existing home sales on Wednesday.

Euro – European Markets

The Euro has come under pressure after the Irish credit rating downgrade and the increasing prospect that Greek debt will need restructuring – these sovereign debt issues have taken the single currency lower against other major counterparts. It may not be difficult for the Euro to find strength again however as it was suggested at the International Monetary Fund meeting over the weekend that another European rate rise will come soon. The IMF meeting also saw increased predictions for the Euro region to grow by 1.6 percent in 2011 and 1.8 percent in 2012.

Other Currencies – Highlights

The Canadian Dollar has weakened after three week’s of strengthening as oil prices declined. The Bank of Canada also commented on the negative effect that the strong currency was having on exports. The fact that the Canadian Central Bank is expected to keep interest rates at 1 percent throughout the second quarter may prevent excessive further gains although oil prices are likely to be the dominating factor.