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 Weekly Euro currency forecast from France Financial and Guide2 Midi-Pyrenees

That's a bit more like it.  Professional pride takes a dent if the currency goes up when I say it should go down, or vice-versa.  At least this week saw some movement in my predicted direction, albeit south.

Sales drag...

The pound fell to a seven-week low against a robust euro on Thursday, after UK retail sales fell by 0.5 percent in August, upsetting commentators who had forecast a small increase following some months of decent growth.  This may be seen as a sign that UK consumers are concerned about substantial spending cuts planned by the government later in the year.

Market sources are indicating that stop loss orders would be triggered if the rate falls below 1.1900.  Stripped of techno-speak, this means that if it goes down that far people and institutions will buy the euro because they think the rate will go even lower.  That in itself makes the rate go lower still.  Confused?  Try doing it for a living.

PIGS again...

To compound sterling's problems, Spain (the S in PIGS) held a very promising debt auction.  There were fears that these countries could struggle to fund their increasing debts, but the Spanish debt auction went rather smoothly, and that helped the euro.

Industrial Orders...

Just to make life a little more difficult for the pound, a survey by the CBI showed British factory orders fell a little instead of a predicted rise.  The survey also revealed a pick-up in inflationary pressures, while a Bank of England survey showed inflation expectations rose to their highest in two years.  A fall in export orders in the CBI survey also spelt bad news as we are counting on external demand to produce growth.

What now?

I'm going to stick to my game plan here.  I think sterling will weaken more than the euro in the short term, and then the euro will come under more pressure after Christmas.  I'm still looking for 1.1800 or lower over the next few weeks, but please don't quote me.

A bientot,   Rob

Rob Hesketh and France Financial

Rob moved to France in 2003 after working for 30 years in International Banking in the City of London and Brussels.  He joined the Spectrum IFA Group in 2005 and became registered and authorised by the French fiscal authorities in mid 2006.  He is now a partner in Spectrum and looks after client relationships in the South West of France.

Get more details about Rob Hesketh, France Financial and Spectrum IFA Group

France Financial IFA

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