Difficult Week In Store For The Euro
Last week saw the Pound open at the 1.16 levels against the Euro as the markets re-opened after New Year. This week Sterling is starting in a much brighter position against the single currency with the rate up to 1.20. In contrast, at the start of last week, Sterling was at 1.56 against the Dollar but this week is slightly lower at 1.55. What has caused these movements and will these levels last throughout this week? The main reason for the weakening Euro has been ongoing concerns regarding the sovereign debt issues that refuse to go away. It has been reported in the press that Portugal is steadily shaping up to be the next nation after Ireland that will require – or may be forced to accept – EU rescue funds to shore up the failing economy. This, alongside a series of bond auctions due in Italy, Spain and Portugal throughout this week, are dragging the Euro down. The bond auctions this week are expected to show that demand has diminished for European assets and have the potential to pull the Euro down further. If you have any foreign exchange transfers to make involving the Euro therefore, it is advisable to get in touch with Currency Solutions to find out how you can either minimise losses or maximise gains this week by booking the transfer at the right time as well as choosing the best transfer option. The US Dollar was the main currency in the headlines last week as a wave of positive data early in the week, particularly ADP payroll data, caused the Dollar to surge and set the bar high for farm payroll data at the end of the week. In the event, farm payroll data actually came in lower than expected causing the Dollar to dip against Sterling and currencies such as the Yen although it has maintained its advances on the beleaguered Euro. Anyone buying assets from, or transferring money to Australia will find the currency has been weakening due to the severe flooding in Queensland. The Australian economy is largely dependent on its exports and the cost of the floods themselves as well as the fact that the floods have significantly stifled export activity which has made the economy more vulnerable. If you will be transferring funds into the Australian Dollar in the upcoming months, it is important to remember that you can always fix an exchange rate in advance by using a forward contract to secure a preferential rate today for the future. In other currencies, the Canadian Dollar is still fairing well on better than expected jobs data as well as the increase in crude oil prices.