Written by Sarah Jenkins currency analyst Find here the weekly pound to euro forecast for 2012, current predictions for where the euro will be later in 2012 and how sterling will be affected by any movement in the euro. We take a look at how the euro is performing vs sterling, the euro vs the dollar and how is will affect us in real terms, our income and our property prices. February 20th 2012 The euro received a boost today as it looks as though the heads of Europe will agree a bail out package for stricken Greece. “If they reach a deal and Greece is able to avoid the outright default, the euro should be well supported in the near term.” This was the comment from strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. The forecast is for sterling to weaken further vs the euro if the bail out is agreed. February 15th 2012 Importantly the eurozone finance ministers have cancelled a meeting today which was going to discuss and approve a $170 billion financial rescue package or Greece. A telephone conference has been organised instead. There are major concerns that Greece is heading towards a default on its loans. Greecce has not met the conditions set by the European Union to receive a second package for its balilout. February 1st 2012 The euro was higher today than the pound but further gains by the euro are unlikely in the current economic state. The pound is doing well versus the dollar but with further monetary support likely from the Bank of England, the pound is not getting a lot of support from investors.  29th January The euro rose vs sterling on Friday after a plan to help Greece sort out its debts emerged. However further boosts for euro remain dampened by the forecast that Portugal is running into trouble repaying its own debts. The Spanish government has pledged to remove the listings of properties on Spanish banks books that are listed as assets when in fact they are anything but this. Spanish banks are holding onto millions of euros of properties and they are not offering them to market as their value is often worth less than the mortgage that was on them. However the Spanish Government plans to force banks to release these properties onto the market. The result is that Spanish property prices may see a further decline but for UK buyers this is good news. Find Spanish properties for sale on www.InSpain.tv You can sign up for the distressed properties newsletter and receive reduced properties and distressed properties from estate agents in Spain.    23rd January Sterling fell vs the euro today. Investors had new hope that the euro crisis could be resolved which spurred buying of the euro vs sterling. "Today's move up in euro/sterling has mainly been the move in euro/dollar feeding through as we have seen a bit of optimism towards a Greek PSI deal," said Michael Sneyd, currency strategist at BNP Paribas. 17th January The euro was up vs the dollar today and the pound as sentiment improved for the euro. The pound could face further weakening if the Bank of England decided to resume monetary easing as many economist predict early 2012. 14th January The euro climbed back on Friday from a near 2 week low versus the pound. Standard & Poors have now downgraded several countries credit ratings meaning that in the Euro Zone, only Germany remains with a AAA credit rating. France and Austria have both been stripped of theirs. 6th January 2012 The euro fell further against the pound today, down to a 16 month low against the pound. Investors are shunning the euro in favour of stronger currencies such as the pound and the dollar as they believe that 2012 is going to see more problems for Euro Zone countries. 4th January 2012 The euro today went to a 1 year low vs the UK pound/sterling. The euro is falling out of favour compared to the pound. Many investors believe that Eurozone countries are heading for a recession in 2012 and are buying the pound instead of the euro. However if the UK also slips into a recession in 2012, then it will the US dollar that will make the gains. 31st December The euro ended the year at a 10 month low vs the yen and struggling to maintain its earlier gains vs the dollar. Most economists predict that the euro in 2012 will continue its decline as investors look to stronger currencies as safe havens for their cash. 17th December The euro was at a near 10 month low vs the pound on Friday. The euro remains under intense pressure after 15 out of 17 countries had their credit rating potentially downgraded following the recent summit. 8th December 2011 The euro fell to a one month low vs sterling today and look set to fall further vs sterling after the market re-acted negatively to the ECB's weak attempts to halt the European debt crisis. "The ECB meeting was taken as a bit of a euro-negative. The market maybe wanted to see more non-standard measures and affirmative action, so the euro has struggled as Italian bond spreads have rocketed back up, reversing the gains made earlier in the week," said Lee McDarby, head of dealing for corporate and institutional treasury at Investec. 27th November 2011 The euro continues to be shunned by investors who perceive it as a weaker currency. Surprisingly last week Germany failed to sell its bonds which it wanted to auction off, this could signal that Germany too is now seeing investors lose confidence in its strength. If this continues then the pound could increase in value against the euro. 16th November 2011 The euro is at a 4 week low vs the dollar as investors sold the euro, preferring the safe haven of the dollar over other currencies. European Commission President Jose Manuel Barroso on Wednesday said the euro zone faces a "systemic crisis." 14th November 2011 Italy will soon auction 3 billion euros in 5 year bonds and this will test the market's re-action to Italy's debts. "In short, the market can be more confident in the ability of Greece and Italy to pass the necessary fiscal measures to regain control of their debt, but the economic and structural issues facing the euro zone remain a problem," said Credit Agricole CIB rate strategist Peter Chatwell. 11th November 2011 The Italian senate has agreed to passing extreme measures to get the country out of debt including increasing the retirement age to 67 years and more job cuts across the public sector. The Italian prime minister Silvio Berlusconi will resign as soon as the measures become fully approved by all quarters. Italy's debit is now at 1.9 trillion euros and there had been major concerns that Italy could default on its debts. This would have impacted France heavily who has made large loans to Italian banks. This would then have a domino affect on the UK which is closely connected to loans it has made to France. So this is good news for Italy and the rest of Europe. 26th October 2011 Should the UK take on the euro? There were arguments years ago that the UK should join the euro and most people would now agree that this would have been a terrible mistake. I am one of those people, I think to join the euro would be a ticket to print money and our housing market would collapse. We have property both in the UK and in Spain. Whilst over the last 2 years our UK/London property has increased in value our Spanish property has dropped by 50k. In 2 years another of our Spanish properties dropped over 100k euros. For those that bought in Spain just a few years ago they have a serious problem selling and the Spanish banks are holding onto repossessed properties because they are unable to sell them as their value is lower than the outstanding mortgage. The Guardian however has printed an article still saying that we should join the euro. Read below... Britain should consider joining the euro Many feel the current eurozone problems justify the UK's refusal to join. In truth, there is limited advantage in our autonomy With the crunch EU summit today, it will seem very eccentric to many to raise the question now about whether Britain is well served in ruling out future membership of the single currency. Of course, there is an overwhelming opinion among the UK's political and economic leaders that the UK has been well served in not joining the euro. Even some experts, such as Adair Turner, who were very much in favour of UK entry at the start, have confessed that they were wrong. And as Europe's leaders struggle to resolve the problems in Greece and other distressed countries, the one British consolation has been to thank the Almighty that we are not members, that we have our own central bank and that we retain the power to devalue our currency. But this easy dismissal of the euro for Britain is ignoring some inconvenient but relevant truths. One truth is that with all the current troubles the euro has gained 25% against sterling despite all the Grecian and other dramas. The euro is a strong currency, as British holidaymakers know all too well. For a short time, the UK's devaluation did seem to work – exports and growth improved (although the rates of growth were lower than in Germany and the other northern European members). Inflation, too, remained low initially. But in the past 12 months, the recovery has stalled and inflation has soared to 5.2%. The devaluation did not give British exports a sustainable adrenalin rush. And now we are suffering from the cheaper pound as we pay more for imports of our food and energy. The inflationary impact is now painful. As the UK congratulates itself on staying aloof from the euro, it should look thoughtfully at Ireland. Ireland was badly affected by the recession but there are encouraging signs of improvement. Industrial production in August was up 11% on a year earlier. As a member of the eurozone, Ireland could not devalue. Inflation is low – a 0.7% rise in consumer prices over four years, contrasting with the UK's 28% increase in food and drink prices over the same period. Exports are up and, although unemployment remains much higher than here, there is a hint of optimism. Interestingly, public opinion in Ireland is still in favour of staying in the euro and not following the devaluation road of the UK. Finally, there is the crucial question about British influence. In all the discussions about the eurozone's future, British ministers are urging the leaders of France, Germany and the others to get their act together, much to the irritation of President Nicolas Sarkozy and perhaps some others. The British ministers sometimes resemble spectators at a football match: non-playing experts with plenty to say but little to contribute. If the UK was a euro member, it would not be waiting to see what the French, Germans and the rest come up with but, instead, would be playing an active and central role in the search for solutions. Government ministers rightly acknowledge that the UK's economic future rests to a major degree on the future of the eurozone. Yet as non-members we have limited ourselves in what we can do about its problems. In truth, there is limited advantage in our autonomy. So, if the eurozone comes through the present crisis, let us not close our minds to the possibility that it could be in the UK's interest to quit the devaluation road and reconsider membership of the eurozone. Pro-Europeans should have the confidence to challenge the conventional wisdom. Original Article 21st October 2011 All eyes are on European leaders to see if the summit to be held shortly will fnally resolved the debt crisis in Europe. Will more money flow? If not we can expect the forecast for the euro to be a grim one, with the dollar and the pound rising at the expense of the euro. The summit takes place this Sunday. 19th October 2011 The euro fell today vs the pound as there is still no final deal being struck to rescue Greece and other debt ridden Eurozone countries. It was reported, With a crucial leaders' summit planned for this weekend, France and Germany are split on whether the private sector should be required to make a significantly bigger contribution to Greece's second bailout package than was agreed in July, participants in the discussions said. Agreement on a Greek deal remains hampered by Berlin's push for a much bigger hit to the private sector than what was tentatively agreed in July, the people said. France, the European Central Bank and the European Commission remain very skeptical of greatly increasing the exposure of private-sector lenders. Original story Comment Once a deal is struck the forecast is that the euro will rise faster than the pound. However there have been months of negotiating and still no deal has been made. The market place is jittery and as a result the euro will rise and fall regularly. 11th October Currency speculators still believe that sterling and the euro are good bets for the future for investors looking to make money from buying currency. Currency speculators remain bearish on the future price of the euro and the pound versus the U.S. dollar. Specs are now short 107,464 euro contracts and 88,757 contracts of the pound. Each euro contract is worth about $167,300, and the pound contract is worth about $96,000. Specs also are long almost 50K contracts of the dollar Index. The only significant U.S. dollar short position is versus a spec long in the Japanese yen of 37,855 contracts. The total net USD long position this week is 212,209 contracts, up from 198,397 in the prior week. The total open interest in the eight contracts reviewed was a big increase, 120,831 contracts. The increases were in the pound, the Australian dollar the Canadian dollar and the euro. Much of the increase in the open interest was commercials on both side of the market. Usually the large and the small specs are on the same side of the market once a trend is established. Currently this is the situation in the DI, the euro and the pound where all parties are short. Specs are going different ways in the yen large specs are long, the Canadian dollar large specs are short, the Australian dollar large specs are long and adding to the position, and the New Zealand dollar where the large specs are long. Large specs are generally the most astute traders, and it is important when they flip from a long to a short or vice versa. The only large spec group to flip during the week was in the Swiss franc where it flipped to the short side of the franc. Does this mean the SNB is going to attempt further weakening in the franc, or is the currency merely going to sink further should the euro fall? Original story 5th October, euro falling The euro fell again today as the promises to strengthen European banks seems to lack any substance and is not reassuring the markets that Greece will not default. France and Belgium Alexander Chepurko, foreign exchange analyst at Forex Club in New York said, "There is no good news coming from Europe, the attempts at good news are jawboning." 3rd October, Treasury worried about Euro breaking up The Treasury has voiced concerns about the possible break up of the euro and the negative effect this would have on Britain. “It is clear that a break-up of the euro is not in the interests of Britain,” Mr Osborne said last month.p] would be very, very great,” a Treasury official told the Financial Times “It is clear that a break-up of the euro is not in the interests of Britain,” Mr Osborne said in September. If the euro broke up the direct effects to Britain would be a loss of confidence, our ties with the euro and banking overseas and the loss of trade. 40 percent of our exports go to Eurozone countries. If the euro broke down it would go down in value, the price of sterling would seem considerably high and so our export trade would be reduced. Jens Larsen, chief European economist at RBC Capital Markets, said: “I don’t think it is much of a guess to expect the resulting turmoil to wipe out what remains of the banking sector”.