Is the frost thawing for the Euro

Whilst the currently strong Pound continues to gain across the board, many of you will have seen the GBP/EUR rates drop over the past few weeks – loosing over 2 cents against the previous year long high. It seems like a distant past now when the ECB cut interest rates, however with the Eurozone continuing its claw out of recession, indications of no further change to interest rates, plus the ever present Euro positive Mario Draghi, it seems that the frost has begun to thaw for the Euro and some strength has returned.

Certainly the US debt crisis is also weighing on this situation as we continue to see the Dollar weaken whilst the Euro gains strength. Without doubt Draghi will in a way welcome the US situation as the longer the Dollar remains weak it only adds fuel to the Euro fire. So, whilst the pound is the strongest it has been in some time across the board it is still struggling against the single currency and at present it would seem we are at somewhat of a crossroads. Today we have both UK and EU inflation figures – both of which are likely to remain unchanged, so for any indication of movement probably best to look towards the EU Zew Economic sentiment survey and US inflation figures. Should the survey be Euro positive and inflation figures USD negative we could see the Euro continue its current rally and take even more ground against the pound, only aided by the flagging dollar.

Indeed should you have any upcoming currency requirements you may be wise to speak to your Currency Index broker sooner rather than later to avoid potential disappointment. Aside from giving friendly and professional guidance we can help you stay well informed and well ahead of the market