Could The End Of The European Recession Be In Sight?

One of the most in depth and reliable reports came courtesy of Reuters.  You can read the article they have published at this page.  It gives you an idea of how things may develop from this point on.

But what effect has this news had on the Euro?  It is actually too early to say, since the announcement came on Monday 14th September, and the markets were still lively and far from the end of the day when the announcement was made.  We shall have to wait and see how things develop over the next week or so to attempt an answer to that question.

But in addition to this we can look back to see how the Euro has performed against other currencies in recent weeks.  How has it been doing since the beginning of September, for example, which we are now halfway through?

It has had a choppy time against the Japanese yen, first doing well before dropping and then clawing some back again.  On the 1st the Euro was claiming 133.260 yen, before dropping to a much lower 131.630 the following day.  It recovered quickly though to get 132.470 the day after that, and then lost a little bit of ground to go into the weekend on 132.450.

Week two started strongly for the Euro, as it claimed 133.330 yen on Monday night.  It got better still the next day, charging to 133.570 before consolidating that result and ramping it up to 134.130 on the day after.  What could happen next?

As it turned out the next two days swung back – finally – in favor of the yen, as the exchange rate on the currency converter went down to 132.620 on the 11th.

But what happened elsewhere?  Was the Euro quite so choppy against the US dollar for example?

As it happened the answer was yes – although the Euro got the upper hand.  It kicked off the month on an exchange rate of 1.4314, before dropping down to 1.4220 the following day.  By the time the 3rd was over, it was back up to 1.4335, but it didn’t have the strength to hang onto that increase through the weekend.  By the time everyone headed home on Friday night it was on 1.4262.

The Euro didn’t waste any time the following week though.  It was clearly up for a battle and things went its way for the entire week.  On Monday 7th September it had grabbed an exchange rate of 1.4330, before pushing on and adding significantly more to that by the end of the next day.  The final figure then was 1.4473.

Wednesday kept up the momentum and the Euro was standing at 1.4522 by the time that day was over.  The jump up wasn’t as noticeable the following day, as the Euro claimed 1.4545 US dollars, but it was still something worth noting.

And finally the week ended with the Euro bagging 1.4594 US dollars – some 0.0332 more than it was on the same time the week before.

So is this pattern going to continue when the news sinks in about the end of the recession in the Euro zone?  It would certainly seem like the Euro is in a strong position to claim even better exchange rates against all comers, but we will have to wait and see how things play out in reality.  We would hope that the good news will indeed affect the Euro in a positive way, but it may also have a negative effect on other currencies.  If other countries are still struggling to pull themselves out of the recession, the news from the Euro zone may not have a good effect on them.  Perhaps most notable in this area would be those countries in Europe which aren’t part of the single currency.

Of course it remains to be seen what really happens.  We may end up only seeing a gradual rise in the value of the Euro, rather than anything more drastic occurring.  But it is definitely worth keeping a close eye on the results the currency markets bring us in the next week or two, as this news makes its way round the world.