Investment Strategies

Investors Look To Euro's Slide - Barclays Stockbrokers

Wendy Spires Assistant Editor 22 January 2009

Investors Look To Euro's Slide - Barclays Stockbrokers

Investors capitalising on currency volatility have been able to generate attractive returns, and there could be more opportunities to come from a weakening euro, according to Barclays Stockbrokers.

Those able to successfully short the market were able to capitalise on the record falls in sterling in 2008, along with the currency’s new lows against the dollar. At present four out of the top five most traded currency pairs involve sterling, said Barclays Stockbrokers.

However, the most traded pair in FX markets is euro/dollar the firm says, and there are several reasons to believe the euro will continue to weaken.

“Research from Barclays Wealth continues to point towards weakness in the euro following the ECB’s implementing a recent rate change; there is the prospect that the Euro will slide further in 2009. 

"With this week’s inauguration of Barack Obama, and increasing belief that the US may be the leader out of the current global economic woes, our clients also seem to be attracted to a possible US Dollar recovery,” said Barbara-Ann King, head of proposition, Barclays Stockbrokers.

Michael Sneyd, FX strategist, Barclays Wealth, added: “Despite the euro having fallen around 9 per cent against the US dollar and sterling from their respective peaks at the end of December, the euro remains expensive relative to its long-run fair value.”

Barclays Stockbrokers, part of UK-based Barclays Wealth, is an execution-only retail broker which offers investors shares, funds, ETFs and iShares, CFDs, investment notes, financial spread trading, covered warrants and investment accounts like SIPPs. 

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