Euro Falls Back On Speculation of Worsening Economic Climate

Posted by Rob

July 4, 2008

The euro fell against the dollar after expectation of a worsening economic situation in the eurozone.

Simon Derrick of Bank of New York Mellon said, “a lot of this euro weakness is due to the market changing expectations with regards to ECB policy. Trichet made it clear that yesterday’s move was not the start of a tightening cycle.” – Bloomberg

The euro fell to $1.5656 from $1.5703 yesterday, trading at a near one week low against the dollar.

After the European Central Bank interest rate rise, comments made by ECB chairman Jean-Claude Trichet suggested a more neutral stance from here on. There are some economists speculating that the euro will fall back towards the $1.53 mark.

According to BNP, the euro may fall to $1.53 on a break below $1.5650.

Insurance Sector

With continued pressure on the banking and insurance sectors it is interesting to see a reprot by JP Morgan suggesting that European insurance stocks now offer “strong value”.

This is an area that is under the radar for many investors – with suggestion that banking and insurance stocks are reaching a low at which they offer investors a good value entry.

In the UK insurance sector, good value stocks are worthy of consideration. Along with this, the economic climate is giving many consumers increased incentive to take out life insurance policies to assist in covering any further economic downturn.

With consumers becomeing ever-more knowledgable about what financial tools are at their disposal, using low-cost services to find term insurance enable consumers to make substantial savings over the traditional banks and insurance company offerings when going direct.

Services such as Last Quote and Life Search offer consumers an easy-to-use avenue for arranging various different term insurance policies.

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