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EUR Weakens as Political Tensions Rise – Where Next for EUR Exchange Rates? (Matthew Vassallo)

Friday, February 10, 2017 2:39
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The EUR is coming under increasing pressure as economic & political tensions build across the region.

The EUR value has fallen against both GBP & USD for much of this week but the question I’m being asked by clients is whether this negative trend is likely to continue?

My feeling for some time, has been that clients holding the single currency should be looking to protect the value against the USD and take advantage of the highs we’ve seen against Sterling in recent months. The EUR moved to near three year highs against the Pound but this was more likely due to the on-going uncertainty surround the UK’s Brexit and the negative effect this has had on our economy. This in turn has handicapped any major advances for the Pound, which has inadvertently helped to support the EUR, despite concerns about the future of the EU and the political landscape over the coming months.

With key elections in France, Germany and the Netherlands and support for far right parties in each of these countries, it is clear that all is not well inside in the EU. As the UK’s unexpected decision to leave the EU has proved, along with the appointment of President Trump the expected result does not always come to fruition and it is clear that some people are searching for change.

Any uprising across Europe is likely to sap investor confidence in the single currency further and the current rates against the Pound in particular could look extremely attractive in months to come.

This view is even more poignant when you consider developments in Greece this week, who once again are coming under the spotlight due to fears they simply cannot service their ever growing debt repayments and as such they may have no choice but to leave the EU further down the line, news which would likely send shock-waves through the market.

With so many negative variables, along with economic instability and uncertainty across the region, I would simply not be prepared to gamble on a major spike for the EUR against the Pound.

Despite the fact that the triggering of Article 50 may continue to negatively affect the UK, I believe the problems facing the Eurozone are greater and as such I would be looking to protect any EUR positions sooner rather than later.

If you have an upcoming EUR currency transfer to make and would like to be kept up with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt.

Alternatively, I can be emailed directly on


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