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Old 01-20-2017, 11:30 AM
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Default Canarian Weekly: Tourists ignore Brexit

DESPITE the volatility of sterling to euro, the highest, overall tourist expenditure in 2016 (Jan-Nov) came from the UK at 21% of the total, with an expenditure of over 15bn euros.

This good news means that tourists from the UK were not letting Brexit affect their holidays; nor were they put off by getting fewer euros for their pounds.

At the end of last week, we saw the euro gain some strength with better-than-expected, industrial-production activity in the Eurozone.

It was quite a surprise for economists, with the euro experiencing a good recovery against the US dollar.

The main market-movers this week have been Brexit and the Presidential Election. Increased concerns over a hard Brexit, and the forthcoming EU negotiations, put additional pressure on sterling, and Donald Trump’s press conference also gave rise to concern on the markets.

But instead of the anticipated drop, Tuesday saw good news for the pound after Theresa May’s speech regarding Brexit.

After all the uncertainty, Mrs May made it clear that “Out was Out”, and put the onus on Europe to negotiate properly.

She will be offering an open door to new deals and aims to get the best deal possible in relation to Europe and elsewhere.

The Prime Minister spoke of EU citizens in the UK remaining, and said she expected Europe to return the compliment.

Although the market previously expected a hard exit to have a negative impact on sterling, the pound is higher, in fact, because now there is no confusion. It’s Exit, plain and simple.

For sterling, the market wanted a clear, short-term plan, and, currently, Theresa May has shown her strength. It remains to be seen how long that will last…

Wednesday saw the release of employment numbers in the UK, and today (Friday) will show consumer-spending figures.

Yesterday (Thursday), the European Central Bank gave the latest interest-rate decision, followed by a press conference with President Draghi.

Some analysts believe that, with inflation heading towards the 2% target, the ECB could even consider reducing the current stimulus package.

Last but not least, today we have the US presidential inauguration of Donald Trump, which will be televised from around 3pm.

It will be interesting to see what, if any, impact this will have on the US dollar to Euro.

Will it be a case of “José, can you see?”or for the pound: “Oh, I say old chap, can you see?”

Have a good weekend!

Whether you’re moving to Spain or transferring money overseas, keep on top of the currency market. Our friendly experts at Currencies Direct are only a phone call away whenever you need them. At home in Spain since 1999, we have 12 offices across the country, including one in Tenerife, and we’re set to open more Spanish offices soon.

T: 922 971 781

E: canaries@currenciesdirect.com

W: currenciesdirect.com
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