Euro Weaker Over Greece Speculation

15 May, 2012

Graham Harborne

“A Greek exit from the euro zone is looking increasingly likely with a second round of elections likely to take place mid-June…so the more uncertainty we see in the euro zone the more the euro will drop against the other major currencies” said Chris Erlam, analyst at Alpari.

Against the USD the pound was steady after earlier falling to a one month low as eurozone debt worries led investors to steer clear of riskier currencies such as the pound and euro opting for the safe haven of the greenback.
As there seems to be very little immediate resolution to the current eurozone crisis we could well see the pound push on but sellers of GBP should be very cautious in terms of how much of a gamble they take. Should Greece actually leave the eurozone this will cause all kinds reverberations within the worldwide economy and we would be foolish to think it would not have a damaging effect on our own economy. That coupled with the fact the UK went back into recession last month, now may well be the best rates we will see against the euro so anybody with a requirement should look at all the options available for securing a rate that is the best it’s been for 33 months.
Todays data is fairly quiet in the UK with just Trade Balance data due at 9.30 but at 10.00am we see eurozone GDP and German Business Sentiment releases which if negative could weigh further on an already crippling euro.