With the currenct sharp bounce on the Euro and British Pound we have to now be asking the question, will we get better rates of exchange this year compared these recent low levels? Or is there further weakness to come?

For the Europeans we are heading fast into holiday season, and with that time comes a lot of money transactions as we move off to hotter destinations. British people will be buying Euros by the truck load as they jet off to Spain, Italy and Portugal for their annual breaks. Many other Europeans fly off to far off destinations like South Asia and America. So the exchange rates from the past few weeks may have been the best opporunity to get a few extra nights out while you are away.

The recent news that Greece has finally been declared as junk status by Moodys only confirms what the market has been pricing in for the last few months. The old saying goes, sell on rumour by on fact. Well if that is the case, then maybe that was the bottom for now. Data coming from the UK is holding up the British Pound fairly well, and although not having the reported problems of Europe, Sterling is still out of favor and could well be the next currency to take a big hit over the next year if the new Government fail to get spending cuts right.

So, as we jet off on our summer jollys, the markets may take a breather and even gain some lost ground in anticipation of better times ahead. The true test will come in the Winter months, when companies start to report earnings and the markets will judge whether consumers have confidence to once again invest in the UK and Europe. If not then it could be a case of deja vu for exchange rates. Until then, enjoy your time away.