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EUR Gains Significant Ground on Sterling Following Leaked Brexit Report! (Matthew Vassallo)

Tuesday, November 15, 2016 2:45
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(Before It's News)

The EUR has spiked by over a cent and a half this morning against the Pound, wiping out almost half of the gains made by the Pound over the past few days. Such an aggressive move before any key economic data has been released is particularly poignant and the reason behind it is rumoured to be a leaked report regarding the UK’s Brexit.

The memo indicated that an additional 30,000 civil servants may be required before we can trigger Article 50 and start negotiations and with divisions in Parliament also cited, the Pound’s recent run may well have run out of steam.

I still feel the Pound will find protection above its recent lows and EUR sellers have once again been presented with an opportunity to sell their EUR close to a three-year high.

Whilst it is impossible to predict exactly how the market will develop, my view is that there are too many potential pitfalls in the Eurozone to have any real long-term confidence in the region and if these economic issues start to manifest themselves, expect the EUR to weaken as a result.

My primary concern surrounds the triggering of Article 50 and the knock on effect this will have on the EU, who will be losing one of their integral members. I’m also concerned about any domino effect this has, with other countries potentially considering their status in the single union if the UK can negotiate a good deal following our Brexit.

We must also consider that there are key political elections in France & Germany next year and with a feeling of unrest throughout both countries, will we see a change in government and in tandem future policies? The uncertainty this will create is likely to sap investor confidence and the EUR will more than likely suffer against both GBP and the USD as a result.

If you have an upcoming EUR or GBP currency exchange to make and you are concerned by the increased market volatility of late, it may be wise to look at protecting the gains you’ve made, or limiting your losses with one of our forward contracts, rather than gamble on what has become an increasingly volatile and unpredictable market.

If you would like to be kept up to date with all the latest market movements ahead of your currency exchange, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk

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