The euro picture has remained sketchy at best over the last couple of weeks, with the currency markets awaiting a more definite stance on Europe so it can determine where to move and shore-up some stability..
By Luke Trevail of TorFX
The Greek bailout limped to a decision throughout February, but the severe austerity measures undertaken by the Greek government haven’t proved popular and their ability to repay the loan will now be bought into focus.
As spring begins, news about the UK economy we hope will allow the pound to bounce back above the €1.20 level, although the UK budget on 21st March will prove pivotal in how sterling favours.
Above all fundamentals, however, is the simmering problem of the Euro Debt Crisis, with the ‘bail-out’ measures like what has been seen with Greece being described as putting a colander underneath the problem, only with smaller holes. The leaks will still appear, and are likely to continue to flow.
Economic news from Spain is relatively quiet, with housing taking a welcome boost in February. Many European countries are being accused as burying their heads in the sand regarding their own problems however as the Greek issue grabs the headlines.
At the euro summit earlier in February many finance ministers were visibly pandering to France and Germany, possibly with a view to get a leg-up off a mate if they need to go cap in hand later this year?
Speculation of course remains rife, and volatility in the currency markets can affect any purchase that you are looking to do. Buying euros remains just below €1.20, so within 1% of the highest rate we’ve seen for 15 months. Sellers of euros to the pound however are well placed to try and cover at least some of their requirement soon as the issue in Europe seems close to boiling over.