Home » FOREX NEWS: Pound Stays Strong But Euro Shows Surprising Resilience

FOREX NEWS: Pound Stays Strong But Euro Shows Surprising Resilience


EDITOR’S NOTE: The British Pound hovers near recent highs against the Euro, and problems in Greece continue to weigh on the common currency, though the big surprise is how resilient the Euro is proving to be in the face of bad news. Foreign currency exchange specialist Will Hewitson looks at the factors driving exchange rates, and what the near future might hold.


So what was everyone so worried about?

In my last update I mentioned the possibility of a Greek exit having an extremely negative impact on the single currency. As we move closer to finding out what the future shape of Europe will really look like, I am beginning to think that perhaps we all underestimated the strength and resilience of the Euro.

After the turmoil over the weekend combined with pictures in the news of queues of people outside closed banks in Greece, we were expecting to see a much different market on Monday morning and a far weaker Euro. I walked through the doors of the TorFX trading floor at 07.30 on Monday morning, expecting to be greeted by a buzz of activity and phones ringing off the hook. Instead it was just like any other Monday morning; on Friday 26th June the markets closed with sterling trading at 1.4102, then on Monday morning it flirted with 1.43, a rather underwhelming 1.4% gain.

Overnight on Monday the GBPEUR pairing even retracted to below 1.4, which shows just how resilient the single currency is. As Sly Stallone famously stated as Rocky Balboa “It’s not how hard you can hit, it’s how hard you can get hit and keep moving forward” And the Euro is certainly standing up well to an Apollo Creed style beating.

Well Greece is certainly still the word, however we shouldn’t take our eyes off the big picture. Greece makes up less than 2% of the Eurozone’s overall GDP, so should we actually be surprised that the markets haven’t reacted quite so dramatically? What’s more there is still a large amount of fundamental data out from the UK and Europe as the Greek Tragedy rattles on through its final acts.

Within the past month sterling has traded as high as 1.4296 against the Euro and as low as 1.3544. Whilst we haven’t seen the big shifts we expected, this movement is enough to make a significant difference on a large transfer. We can’t predict what is around the corner and anyone with Euro requirements should proceed with caution and with guidance from a currency specialist.

Will Hewitson 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.


* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).
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