Latest Euro Pound Exchange Rate Report – 22nd March 2010
March 22, 2010 Leave a comment
22nd March 2010
The past week has seen slightly more volatile movement for the Sterling- Euro currency pairing, with a 2.3% shift between the highs and lows of the week. To put this into monetary terms it would mean a difference of £4,600 on a £200,000 trade. We have however seen some positive growth with Sterling, rising to its strongest position in three weeks against a weaker Euro on Thursday, as it extended gains due to the report published on Wednesday with the welcome news that unemployment figures in the UK were lower than expected. This news paired with continued speculation as to the economic instability of several Eurozone countries provided Sterling with a chance to strengthen. Sterling dropped again slightly at the end of the week due to a number of factors, not least the speech made by ECB President Trichet with regards to his crisis management plan, volatility is often experienced during his speeches as traders attempt to decipher interest rate clues. Also responsible for Sterling slipping slightly were the remarks by a Bank of England policymaker that there was some risk of a double-dip recession, although only a subjective opinion, his words have carried with them a weight that has injected a slightly apprehensive feeling amongst UK investors.
This coming week could prove to be a volatile time for the pound as a conclusion to the Greece bail-out saga should come to a head on Thursday. Sterling could strengthen if the plan is insufficient and lacks backing from Eurozone powerhouses France and Germany, but could also do the opposite should the bail out plan prove successful, in which case the euro will strengthen, weakening the value of GBP against it. Until the plan is released, an air of uncertainty encapsulates the market, meaning it would be the ideal time to lock in a rate with a currency broker through means of a forward contract or placing a stop loss or limit order, allowing your currency to be traded at a specified rate to protect against any unfavourable movement.
Security in your currency exchange is paramount in such unpredictable times and this is provided by a forward contract, where you can lock in a rate for up to two years. Those with impending purchases in the Eurozone might look to consider booking a Forward contract. By placing a 10% deposit, clients can eliminate the risk of an unstable GBP/EUR rate by locking in a price today for a transaction that will take place in the future, up to maximum of two years.
With all of these factors in mind, it is of utmost importance to speak with your currency broker to ensure you know all of the options available to you , ensuring you can make the right decisions when it comes to exchanging your currency.
If you have yet to open a trading facility to gain access to commercial rates of exchange click here to open a currency exchange account today.