FINANCE Euro news

Finance

The dollar rose recently rose to its highest level in more than six months against the euro, as persistent concerns over the fiscal health in some smaller euro zone countries weighed on the single currency. (Reuters) The premium that investors demand to hold Greek government bonds rather than benchmark German Bunds set a euro lifetime high. The cost of insuring Greece’s sovereign debt against default also hit a record high. Adding to pressure on the euro were warnings from credit ratings agencies that Portugal needs to come up with a clear plan of further budget consolidation beyond 2010 to prevent downgrades after this year’s plan failed to alleviate concerns. Chuck Butler, president of Everbank World Markets in St. Louis, said the euro may fall to around $1.38 in the short term, but he said concerns over Greece are somewhat “overblown.” “If the euro is getting punished because of the problems with Greece, the U.S. dollar should be getting punished because of the problems in California (and several other States, Ed). California is the eighth largest economy in the world,” he said. We would add that California is bankrupt; the Euro States are nowhere near as debt-ridden. Early last year we suggested that the Euro could fall to around 82.50 or 84 pence and we think that this Dollar Bluff may now give UK expats the opportunity that they have been waiting for to convert some of their UK Pounds into Euros before the Pound plunges.

Call My Bluff

As the USA tries to talk down the Euro, could this be good news for UK expats?

This is not investment advice as we are not financial advisers, so please do your own due diligence checks.