Pound/Euro rates were trading as high as €1.43 this morning when European markets opened, due to the mess that is the Greek debt crisis. When markets opened the Euro gained back some of its losses, and at the time of writing GBP/EUR is around the €1.41 mark. Let’s take a look at what’s been going on.
Greece fails to agree to bailout deal
It now looks almost certain that Greece will miss its debt repayment to the IMF tomorrow. The European Central bank have stopped its emergency lending that was keeping the Greek banks afloat, after Greece announced at the weekend that it would hold a referendum on their bailout terms, and this referendum is next Sunday. Greek banks are now closed, and they have implemented capital controls, meaning that people there are limited to taking out only €60.00 per day.
Last week, talks between Greece and the Eurozone countries over bailout terms ended without an agreement, and Prime Minister Alexis Tsipras then called for a referendum on the issue to be held on 5 July. Until then, the Euro is in a complete mess. They may well agree to the deal, and this will simply kick the can further down the road as negotiations begin again.
The reason the Euro hasn’t fallen further than it has is because there is still a feeling within financial markets that a deal can be done here to keep Greece very much within the European Union. It’s in everyone’s interest to make a deal, especially Greece. However until the referendum is held, there will be huge uncertainty that is likely to reflected in very volatile trading in the Euro.
Are you worried about how the Greek crisis may affect exchange rates?
If you need to buy or sell Euros, then the coming week will be an incredibly volatile one for exchange rates. If you need to buy Euros, or perhaps convert Euros back to Sterling, then the current market volatility and lack of liquidity could make huge differences to the exchange rate.
If you have a currency transaction to perform, then feel free to get in touch with me to discuss how the exchange rate could be affected and the options you can consider to protect yourself against a very choppy currency market. I can also provide a quote on your exchange to compare with your bank or existing broker.
Labels: Best Exchange Rates, Currency, GBPEUR, Greece Debt, pound sterling forecast, Pound/Euro