The Euro is up 1.38pc against the Pound in the last month, and 2.94pc against the Dollar.
By Luke Trevail of TorFX
The end of the year brings about much festivity but goodwill to all men is perhaps not what can be relied on when you look at the state of the world economy and projections about the UK for what could yet prove to be an un-happy New Year.
Growth estimates for 2013 are down and the stark reality that the UK may enter an unprecedented triple-dip recession will be confirmed in January. The eurozone continues with its canny knack of being able to sail on a calm sea despite the storm that’s going on around it and have announced today that supervision of banks within the eurozone will be directly be in the hands of the European Central Bank.
This union will promote prudent banking and will help act as a preventative against bank failures triggered by the ongoing financial crisis still consuming the wider world. For those waiting for the euro to trip up and weaken in the light of Greece, Spain and others not performing economically, this unity of banks should act as a warning that the single currency is trying to cover itself with a blanket of protection with a view to underpin itself against further pressures.
Advice to people looking to enter the currency markets is to remain aware of the current climate. We touched €1.25 in the summer but have now been trading below this key level for nearly five months so those looking to lock in at this price, but are time sensitive may need to re-evaluate their expectations particularly in light of the euro strength that we have seen and the UK’s apparent inability to sustain positive news regarding its own matters. This is something that may weigh heavily on the pound throughout the next 12 months.