A confident Merkel

Adam Wiffen Currency BrokerWritten by Adam Wiffen
Currency Broker
[email protected]

German Chancellor Angela Merkel has returned yesterday from her summer holidays confident that a deal can be made with Greece. She has said that it is more than likely that the IMF (international Monetary Fund) will join Greece’s Third bailout.

 

IMF chief Christine Lagarde has welcomed the agreement, but warned that Greek debt has become unsustainable, arguing the country needed significant relief “well beyond what has been considered so far” and “Greece cannot restore debt sustainability solely through actions on its own.”

EU finance ministers will consider possibly writing off some of the country’s debts in the autumn.

After the Greek government and Euro-group finance ministers formally approved the new terms late last week, the package will now go through the Bundestag Wednesday.

With the package likely to be passed by the Germans we could see the Euro strengthen, potentially dropping GBP/EUR rates into the mid to high 1.30’s, if they can’t we could see rates back up to the highs of the year.

With anticipation for Wednesday’s bailout vote we saw the single currency claw pack some of its losses throughout yesterday’s trading dropping GBP/EUR rates from 1.4150 to 1.4060 before finding its feet back in the high 1.40’s, as you can see from the graph below.

A confident Merkel

In other news

Investors are exiting commodities at the fastest rate in six years, betting a slump in prices isn’t over as oil, corn and gold drop close to the cost of production.

As a result we have seen CAD and NOK continue to weaken against their counterparts as they rely heavily on the price of oil to support their currency.

So what does this mean to you?

In these uncertain times in the currency markets it is key to keep in touch with your expert account manager at Foremost.

We can help you navigate the currency markets to make your money go further.

One option available to clients is a forward contract; it can help protect you from adverse rate movements and is useful for managing your budget.

You can set the price now for a transaction that will take place up to two years in the future, allowing you to fix the exact value of the currency to be paid regardless of market fluctuations.

To find out what other tools may be of benefit to you please contact us on the details below, or open up a no obligation trading account.

Today’s Data

A relatively quiet day on the data front with only UK CPI figures, with the forecast looking to stay at 0% a reading showing any growth could strengthen the Pound against its counterparts.

Across the pond the US has its Building Permits, this measures the number of new residential buildings permits issued which is an excellent gauge on future construction activity.

Adam Wiffen
Currency Broker
[email protected]
Foremost Currency Group
Make the most of your currency
+44 (0) 1442 892064