What would you pay for a euro?

CURRENCIES

Guy Bowles, CEO of Ingenious Asset Management, on new ways investors are playing currency markets.

The eurozone governments are all clamouring for investors to buy euros from them. And what do they want to be paid with? No, not dollars, not sterling, not even gold. No they want to be paid in euros. Yes that’s right, they are selling euros for euros, but here is the catch. They want you to pay for them now but will only give you your euros in six months’ time. So, the question is, what would you pay the Italian government, say, for one Italian euro in six months’ time? Well, currently the market is offering the Italian government 99 cents for one euro. This makes sense, with the one ce...