Euro sales almost double
According to international currency expert HiFX, 69 per cent of currency buyers are now hedging their bets over fears of catastrophic defaults on the continent.
Sales of the euro have increased by 175 per cent as investors get worked up about the uncertain returns the currency is currently offering.
The euro sell-off has been tipped into overdrive following the announcement by Spain that it was once again in recession.
Mark Bodega, director at HiFX, said: "This movement has occurred in spite of Sterling's performance against the Euro over the past 12 months, which on the surface may seem unusual.
"Normally when Sterling strengthens against the Euro, we'd expect to see a raft of Euro buyers."
However, Mr Bodega noted that investors are acting counter-intuitively and suggested that the underpinning factor behind the sell-off was fear.
In short, investors are worried that the euro crisis is about to get worse.
Last week, capital markets editor at the Economist Philip Coggan said that states like Greece and Spain are extremely unlikely to pull out of the euro altogether, suggesting that no one would benefit from such a move.
Posted by Clive Arnell
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