Forex News: Sterling rebounds on Cyprus Euro woes

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As 2013 rolls on, so does the woe suffered from numerous Central Banks across the world.

By Luke Trevail of TorFX

Economic growth within the UK or distinct lack of it will mean that the Bank of England are expected to announce that Britain will enter into a triple dip recession next month. This follows the downgrade from credit rating agency Moody’s from triple A to AA1 that hit the pound like a punch in the gut.

One analyst at Bloomberg described the last 4 weeks as ‘much March madness makes markets melt’, and although this tongue-twister may be a difficult one to say, it does eloquently sum up how this month has panned out.

Buyers of the euro and traders alike have found it hard to pinpoint a trend on the market with each day seemingly providing conflicting opinions about where the market is going to move. This was up until Cyprus reared its ugly head and the euro was sold heavily, weakening the single currency.

As the uncertainty about the future of Cyprus remaining in the eurozone gathered pace the euro weakened from a strong position of just below €1.14 to a high of €1.1865 versus sterling, making up the losses that we saw when the market spiked down following the UKs poor start to this year.

For most, the problem in Cyprus that is yet to be fully resolved is likely to be just the start of another round of issues that the euro will experience from here on. The threat of contagion has to be a concern, particularly in the southern European states of Italy, Greece, Portugal and Spain so anyone who has euros to sell to the UK really should look at trading these funds out of the market before it gets worse.

Those who have time and would like to achieve a better price for GBP to Euros could possibly be rewarded for their patience but are advised to keep a close eye on the news that will emerge from Europe and liaise closely with their currency advisor who will be able to assist with the latest market movements.

Luke Trevail is a foreign-currency broker working for TorFX, a forex broker established in 2004 to provide foreign exchange and international payments to both individuals and companies. TorFX is authorised by the Financial Conduct Authority under the Payment Service Regulations 2009 for the provision of payment services. Their FCA number is 517320. To verify their authorisation, you can visit the Financial Services Register and search the register using their FCA number.

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