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Even though yesterday was a bank holiday in the UK, the currency markets were still open, with the euro suffering against most major currencies after the elections
over the weekend. The voter backlash against recent austerity measures has bought in a new president in France, with the new president, Francois Hollande, wanting a more growth friendly approach and renegotiation of the fiscal compact. This puts France on a collision course with Germany and the EU who are firmly against any renegotiation. In addition to this, Greece has also caused more pain for the struggling single currency, as the 2 main parties supporting the country’s international bailout failed to secure a parliamentary majority, raising further questions of Greece’s membership of the euro.
Due to the level of uncertainty the new government in France and lack of any majority in Greece Sterling gained further ground against the euro, moving to a 3 ½ year high against the single currency. Now that the rate has moved above the 2010 high of €1.24, the door is potentially open for further gains, especially in the short term whilst Greece struggles to form a government. One word of caution to any euro buyers, is once the uncertainty over Greece is resolved we could see these recent gains given back and the pair drift back towards the low €1.20’s
If you wish to forward purchase your currency whilst rates are high contact our currency partners - LINK
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