EDITOR’S NOTE: The British Pound hovers near recent highs against the Euro, and problems in Greece continue to drag down the common currency, especially since the German finance minister suggested the Euro might not be so permanent after all. Foreign currency exchange specialist Luke Trevail looks at the factors driving exchange rates, and what the future might hold.
After much deliberation, frustration and confrontation a rioting nation has finally been firmly put back in line with their European counterparts and reluctantly taken the proposals from its creditors with the hope of avoiding another Greek tragedy.
The Euro was shaken by the uncertainty over Greece’s position in the Eurozone and still seems wary over what the future may hold. The risk of contagion over other countries following Greece’s path seems to have waned for now but the damage has been done for the single currency it would seem. Rates of exchange have reached the highest since October 2007 recently and there is no reason to suggest that we will not be continuing with the trend over the coming weeks.
The UK economic outlook seems far healthier than it has done for a number of years. GDP data released today has shown that the economy grew by 0.7% in Quarter 2 this year and will lend further weight behind Mark Carney’s suggestions that the Bank of England interest rate could rise soon. Carney claimed that there’s ‘a need for Bank Rate to rise (and) reflect the momentum in the economy’. Praise from on high, and arguably the most important man while we map out the future of our economy.
Sterling sellers can cash in now on some of the best rates for nearly a generation and although you may be aiming for a higher given the outlook, being able to trade at €1.40 or above is such a rarity then you shouldn’t be put off by covering at least some of your requirement soon. Euro sellers, hoping for a strong reversal in your favour may be better off looking for the gold pot at the end of a rainbow as the forecast for this pairing does not look good.