£ vs € – where are we heading?
We’ve see the Pound gain more strength against the Euro, breaking through the psychological €1.10 to the pound. The Euro also lost ground against the US dollar, retreating to $1.32.
Last week Ireland unveiled its second budget of the year and as expected announced a large rise in taxes and a cut in spending- will this be the theme for other economies moving forward? With Irelands huge budget deficit the move was warranted and contradicts a move from other economies to increase spending and cut taxes to assist with the economic recovery.
Elsewhere in the euro zone ECB board member Juergen Stark noted that it will take some time for market participants and the public to regain confidence in the banking system and it is this lack of confidence that should be feared; he also focused on the problems in Germany which has been severely hit by the waning global demand, which may undermine the value of the Euro further.
Sterling’s new found resilience was underlined by the lack of selling on the release of the Nationwide consumer confidence index last week.
The market will now turn its attention to the result of the Monetary Policy Committee meeting and any announcement pertaining to the recently introduced unconventional measures for monetary easing.
Sterling, which has had a good run of late, especially against the beleaguered Euro, was seeing a touch of profit taking as we approached the long Easter weekend.
All told, foreign exchange doesn’t have to be difficult and it doesn’t have to be costly. As the Pound strengthens, property bargains in Tenerife will start to look increasingly enticing but it pays to shop around and look at the services offered by foreign currency exchange specialists, who can save you thousands in a transaction.
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