Pound to Euro | Pound Euro Exchange Rate News and Insights

How did the euro exchange rate avoid major losses during the recent bout of Greek woes?

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Category: Pound to Euro

Published on Tuesday, 14 February 2012 12:26

Written by Rob Samson

KBC Markets offer a couple of explanations.

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The euro dollar exchanger rate currently finds itself at 1.3194. When we consider last weeks turmoil in Greece, some have been struck by just how resilient the euro has been.

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It is worth noting that at the euro dollar exchange rate managed to reach a minor new high at 1.3322 on Thursday. While those gains were given away the following day, on a week to week basis the euro finished largely unchanged.

So why have euro exchange rates proven so resilient?

A couple of interpretations are possible says a weekly currency note from KBC Bank in the Netherlands:

That sentiment on the single currency is not that bad as investors assume that Greece will be saved anyway.

Or that, markets gradually move to the conclusion that the Greek story is becoming ever less irrelevant for global markets and thus also for EUR/USD trading.

"We have the impression that the second explanation is become ever more relevant," says KBC Bank.

Going forward KBC believe the market will continue to shift focus away from Greece.

"In Europe, investors might still keep an eye on the result of several government bond auctions. Of late, good auctions supported sentiment on risk and the euro. This is understandable from a risk point of view.

"We keep also an eye on the US side of the story and in particular on US eco data like the retail sales," say KBC.