Euro is rocked again - Business Works
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Euro is rocked again


Currency Solutions
nce more, Sterling has lost more ground to the Dollar whilst managing to claw back against the Euro. This has been largely caused by intensifying speculation over the extent of debt problems in Greece just as a Portuguese bail-out heats up. Markets finally glanced away from their intense focus on interest rates as they digested Trichet’s comments that the next European rate rise will not be immediate. Things also came to a head this Monday as finance ministers met up to talk about sovereign debt issues to the backdrop of the widely-reported arrest of the head of the International Monetary Fund, Dominique Strauss-Kahn, which has led to some uncertainty over leadership and whether financial measures such as those affecting Portugal may be delayed. These issues tarnished the positive GDP data from Europe at the end of last week which revealed that GDP had grown faster than expected.

Those needing to make investments in Euros should therefore be aware that Sterling has gained 0.39 percent on the single currency over the past week. This was not without the usual twists and turns however with the currency falling down to the 1.11s against the Euro on Sunday before rising again on Monday. I have an increasing amount of clients making Euro conversions back in to Sterling. If this is you, then we need to keep an eye out for these sudden movements as the sort of sudden rate seen on Sunday is great for a Euro - Sterling conversion. One way that you can make sure that you do not miss a rate, even if is touched momentarily, is to use an automatic market order – this means that if your target rate of exchange is hit even when offices are closed overnight or at the weekends, the money will be automatically exchanged for you.

It was another weekly drop for Sterling against the Dollar which benefited even more from Euro weakness than the Pound. This will not come as good news for those purchasing investments in the US. The fall was quite hefty with the Pound falling by 1.04 percent on the newly robust Dollar. Better-than-expected farm payroll data from the US in the previous week had helped the currency and the positive inflation report from the Bank of England, cementing opinions that a UK interest rate hike will happen later this year, was not enough to overcome the newly unstoppable Dollar. Although both the UK and US trade balance figures last week showed worse than expected deficits, the UK’s figures were particularly short of forecasts.

The biggest event for Sterling this week will be the Bank of England minutes today (Wednesday). Markets will be rushing to find out whether there was any new support for a rate hike revealed in the voting patterns of members – if this were the case, Sterling is likely to receive another upwards push against the Euro.


For further advice or how to save thousands on overseas investments compared to the bank, protect yourself from currency movements or set up regular payments, get in touch with the dedicated Business Works Corporate Currency Broker:
Max Johnson of Currency Solutions on +44 (0) 207 740 0000 or by e-mail:

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