Weak euro will help economic recovery

Foreign exchange markets are always characterised by a certain degree of volatility and tend to be pushed about the place by short-term economic and political developments. 

For companies with exchange rate exposure, currency movements can cause extreme difficulty, not least because currencies are by far the most difficult asset class to forecast with any degree of accuracy. Uncertainty is about the most appropriate word to describe currency markets, which creates serious risks for companies that trade outside their own currency area.

Volatility is one thing, but what we have seen evolve in currency markets over recent months, and particularly over the past couple of weeks, is truly dramatic. It cannot be described as volatility, but rather as the emergence of a compelling trend.