Welcome to our account of movement in the foreign exchange rate over the weekend. This is intended to help keep you up to date with the rates, so that you can change currencies at the absolute best time for you.
The foreign exchange rates haven’t changed a bit over the weekend, as the markets continue to hold their breath about the future of the Eurozone. For instance, at a much-trumpeted summit last Friday, the leaders of the 4 biggest Eurozone economies (Germany, France, Italy and Spain) met, in an attempt to agree a shared platform going forward. Vague sentiments of solidarity aside though, the summit just served to demonstrate the differences between them.
Why haven’t the exchange rates changed?
Because after 18 months of summits between European leaders, in which nothing has been solved, markets no longer expect so much from them, nor place so much faith in them. If once upon a time a statement of mutual solidarity between the Eurozone Big 4 might have sparked a rally in the euro, today it barely warrants a shrug. It would take solid action to solve the crisis to move the markets at this point, and aid the euro exchange rate.
What’s going to happen in Europe going forward?
The meeting of the Eurozone Big 4 was intended to precede a full-blown European Union summit, scheduled this Thursday and Friday. We’ll therefore see if the continent can’t make more progress with its debt crisis later this week. In my opinion though, if just 4 members of the Eurozone can’t agree a future direction, the likelihood that 27 can is all but nil. Hence, it’s likely the markets will react to this forthcoming summit with as much nonchalance as the last, and the rates remain unchanged (unless of course something exciting happens.)
Is anything else set to affect the rates?
Over the weekend, Bank of England committee member David Miles told the Financial Times the UK needs £50 billion more in stimulus to remain on track. If the central bank does therefore go ahead and inject more cash into the economy, that could dent the pound, as it sends a clear signal that Britain is having trouble keeping aloft. However, that’s not something we’ll find out until July.
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I will return with my next update tomorrow.
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