With the news of contraction in the UK economy, you could be forgiven for thinking that following a turbulent January,February couldn’t get any worse.
By Luke Trevail of TorFX
Sadly you’d have been wrong, as the UK credit rating got cut by ratings agency Moody’s from AAA to AA1, the first time that we’ve lost this status since 1978 which really kicked the pound while it was down and has sent rates tumbling.
The economic picture in the UK now appears to very gloomy, and anyone with a requirement to buy euros really should be advised to cover at least some of their requirement soon, as the prediction is that we will officially be in a triple-dip recession this time next month and the pound will continue to fall.
Of course, the eurozone is not adverse to its own problems and many speculate that as much as the UKs dirty laundry is being very publicly aired, it’s only a matter of time before Greece, Spain, Italy and Portugal falter on the loans that they have been granted by the EU and the single currency will weaken heavily.
The interim period will provide a huge amount of volatility and opportunities for clients who are selling euros and repatriating back to the UK will be given fantastic chances to trade at the best rates that we’ve seen in well over a year.
Advice to anyone who is stepping into the currency markets is to remain cautious and never try and second guess the trend as it often surprises, and moves in one direction or the other for apparently no reason. Tread carefully but look out for the opportunities that we will certainly see over the next few weeks.
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