The months roll by but the same old story continues to shape the currency markets with the eurozone posting negative data with less than optimistic forecasts for the medium to longer time but the single currency continues to strengthen rather than fall of the proverbial cliff that many market watchers are expecting.
By Luke Trevail of TorFX
News today is that the OECD has cut its growth forecasts within the eurozone and has called for the European Central Bank to consider doing more to boost growth.
An estimated contraction of 0.6% this year will not help the economy keep up with faster-growing counterparts in the US and Japan. In its twice-yearly Economic Outlook, the OECD said that prolonged economic weakness in Europe could have wider reaching problems and potentially damage the global recovery.
While we may want, predict and even pray for things to improve, the Euros’ resilience and continued strength against numerous currencies particularly the pound doesn’t seem to be letting up anytime soon and buyers who this time last year were arguably spoiled with prices above €1.20 (versus sterling) may have to settled for the mid-teens this Summer.
Anyone who is looking to move funds from the UK to Spain should trust their own decisions and not assume that we are going to see any drastic change in their favour over the next month or so. The markets are designed to be volatile and often, as has been the case recently when you expect the market to improve but they actually go down it’s fair to assume that this trend will continue.