EURO STERLING FORECAST

Euro sterling forecast, what might happen to the euro this year and into next. What is the Euro Sterling forecast for 2012? Some countries with the Euro such as Greece and Ireland have huge levels of debt and we have already seen the European bank move to assist these two countries. In 2012 the forecast is that the European bank will also need to assist other countries such as Spain and Portugal. All the major currencies have been hit by the economic crisis. Early in 2011 the European Central Bank hiked interest rates up. The result was a huge boost to the euro but this had disappeared by the autumn of 2011 as the issues with Greece struggling to repay the interest on its loans affected the value of the euro significantly as the maketplace became jittery of buying a currency that was clearly close to being devalued. There remains a possibility that some countries may have to pull out of the euro.Regarding the  euro vs the pound by the end of 2011 there looked to be no currency stronger than the other and investors instead piled their cash into the yen, dollar and gold rather than sterling and the euro. The Bank of England looks unlikely to raise UK interest rates until 2012. This forecast has seen investors piling their funds into the dollar rather than sterling and for safety gold which has doubled in value over the last 4 years. The Bank of England has resumed monetary easing further blighting the chance of sterling making a recovery. The euro forecast for the rest of 2012 looks weak, with the G20 not reassuring the markets that Greece, Spain and Portugal can cope with its debts and there are no planned higher interest rate hikes making the euro less valuable as a currency. These issues are now spilling over to even more European countries further causing issues for the euro as does the downgrading of several European banks. Both sterling and the euro have little going for them for the start of 2012 unless the G20 can convince the markets that the euro is going to be ok. There is talk that leaders may agree a 50% reduction in some countries debts which would help.