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What is the Future for the Euro
Foreign Currency DirectOct 20, 2011 10:51 BST
TOP STORY – Six Days until the End of the World
This is a dramatic realisation as quoted from Timothy Geithner which every tax payer consciously or not will be affected by in a matter so severe that without coming to terms with indebted nations economic stability could cause the ship that is Greece to sink and pull other Eurozone rescue parties down with it. During meetings with G20 members Timothy Geithner warned that without a massive firewall; preventing contagion from Greece spreading to fellow Eurozone countries would be all but inevitabile.
Some might argue that with a sustainable growth plan in place Greece can still be recovered and I would have to agree; However with Greek debt only getting bigger and the strikes all across Greece getting worse the country is turning into anarchy. Having to adhere to the tough austerity measures is becoming unrealistic and
with Greek interest rates nearing the 200% marker on its one year bonds (which they are paying off with bailout money); It seems improbable a radical improvement will occur soon.
This is certainly uncharted territory for the Euro with only one absolute result; movement and volatility guaranteed. It just depends on whether Greece manage to scrape themselves back or fail. One of the two will determine how much movement we will experience; either way it will not be positive for Euro.
Anyone can paint a gloomy picture however this information is certainly not the worst of the situation and any individual with any kind of exposure (corporate or private) should look to protect their interests by contacting one of our experienced Currency Specialists on this number: 01494 725353 and discuss their potential
exposure to this outcome.
A Miserable Britain:
With the release of CPI hitting 5.2% and RPI hitting highs of 5.6% this year and high unemployment; Britain’s Misery index is at its highest since Black Wednesday in 1992. To put it simply the misery index is an indication for the well being of an economy measured simply by adding unemployment by inflation. An increasing index represents a worsening economy. With the holiday season fast approaching and the release of these high interest figures and unemployment can only mean a sharp dip in retail sales coupled with increased energy bills means some will be looking at a cold and unappreciated winter. On a positive note for sterling the BoE is confident that as we are not subject to the same scenario which occurred last year with VAT and oil prices so inflation should settle during the course of 2012. That aside however the misery index will stay high for until at least Q2 of 2012 as unemployment is expected to rise to 3million which will make up for any reduction in inflation figures.
As a recovering currency from recent lows sterling is not left in a strong position over the coming months as investors view this level of stagflation as a weakness on the British economy. To speak to one of our advisors about utilising different contract types in order to avoid any potential losses please register with us by clicking the following link: www.currencies.co.uk/registration
U.S Dollar Outlook:
House building figures released at 13:30 yesterday showed that new builds in the US have hit its fastest pace for 17 months in September however the majority of growth was focussed on apartments and not family homes showing a lack of confidence from US construction firms for future prospects. This with the US manufacturing data up by 0.2% in September and the 1.1% increase in retail sales would indicate a positive outlook for the dollar and move to a stronger position against sterling in the not too distant future.