By Luke Dyson
As we approach the mid point of the year, looking back we have seen a particularly volatile time on the currency markets. With some big drops across all the major currencies, but also some significant gains. The Dollar has largely been the loser with President Trump’s new government ushering in a turbulent time for the Greenback, with the Euro the main beneficiary.
Last week we saw just this , with Sterling making some outstanding progress against the Euro, reversing recent loses to retake the highest level seen since April 1st.
This was after the financial markets responded well to a decision to stop President Trumps tariffs, which was imposed by the US Court of International Trade. They decided that President Trump has over stepped his authority by imposing significant tariffs and breached the International Emergency Economic Powers act. As a result major stocks recovered giving indications of stability and reducing trade war tensions.
However this Sterling gain was very short lived, as President Trump appealed the decision and the Court of International Trade ruled the tariffs could remain in place while the appeal is heard, giving a glimmer of hope to the President that they might reverse it. So, with the tariffs back in place and markets once again plunged into uncertainty, the Dollar crashed further. Large scale investors moved back into the Euro, which is now seen as the significantly safer option, and so the Euro gained a massive boost of strength pushing back against both the Pound and the Dollar.
Moving forward it is very hard to predict what will happen with the market in the near future. However with where the market is at present for buying Euros, it is still within a cent of the recent highs, and so may well be worth considering taking advantage of, as it is still a very positive buying opportunity.
If you would like to discuss this further please get in touch with your currency consultant today to get a strategy in place or even to take advantage of the current rates.
News out this week:
Monday
US Purchasing Managers Index
Wednesday
US Employment Change
Thursday
European Central Bank Interest Rate Decision
Friday
European Retail Sales
European GDP
US Non Farm Payrolls