The Euro has been under pressure from the mounting issues in the Eurozone which has been great for Euro buyers.
The bailout for Spain impressed investors for little more than a couple of hours last Monday. They saw it as another Euroland sticking plaster in place of the major surgery that is really necessary. By the end of the week Spain was having to pay 7% interest on its ten-year borrowings, a level that had previously provoked full-scale bailouts for Greece, Portugal and Ireland.
The Greek election went better than some had feared. Syriza, the anti-austerity left-wing party that had spooked investors with its implicit threat to pull out of the euro, made second place but is unlikely to be involved in the new coalition.
Despite the bailout of Spain and the results of the Greek election for the pro austerity party it does not mean the Euro is safe, further cracks in the Euro zone could cause more problems. On the flip side there has been positive news for Sterling yesterday after the release of the Bank of England minutes which highlight that although they decided not to embark on a new round of Quantitative easing they did acknowledge that further stimulus will become warranted at some point. This caused Sterling to lose ground against the Euro slipping from the recent three and half year highs. Sterling has made a small rally today on the back of a surprise bounce back in retail sales.
Anyone with a currency exposure should be speaking to their dealer and either trading now to cover their risk or placing orders in the market.
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