Here comes the Euro

Last week was a game changer on the markets with the Pound and the Dollar finally being forced out of the centre stage to make way for the Euro. The Euro has been struggling for many months due to poor economic performance and more recently the Greek crisis, but finally with figures starting to improve and a bailout deal agreed for the Greeks, the Euro is back and back with a bang. Since the German’s ratified the Greek bailout last week the Euro has taken six cents back against the Pound and four against the Dollar.

For anyone with a Euro requirement this is dire news; the Euro is breaking support levels with ease – the market has been pricing in the worst case scenario of a Greek exit, contagion into various other European economies and potential Euro break up for months now, and with these fears seemingly all gone now, there is an awful lot of Euro negativity to take out of exchange rates.

The week ahead is very quiet – quite typical for the last in a month with only a couple of data releases of any real note:

Monday
–

Tuesday
German GDP
US Markit PMI
US New Home Sales

Wednesday
Australian RBA Governor speach
US Durable Goods Orders

Thursday
UK House Prices
US GDP

Friday
UK GDP
German Retail Sales
German CPI Inflation
European Economic Sentiment and Consumer Confidence

The various country’s GDP figures due are the only real “market movers” due this week, so expect current trends – Euro strength – to likely prevail, until we see anything unexpected or groundbreaking from the limited releases due.

In the mean time if you do have a Euro requirement the current rates might be a bitter pill to swallow, but in comparison to what might be just round the corner they might actually be surprisingly palatable, so stay in close contact with your CI account manager to be kept informed of exactly what is happening and what your options are – remember you might not need your Euros right now, but a forward contract can help you to lock your rate in before things worsen.