There are four major (foreseeable) economic events for the remainder of 2016 and they are:
Italian Referendum – Italian Prime Minister Matteo Renzi wants power to be taken away from the Senate and given to the government so decisions can be made more swiftly. The Prime Minister has said if he loses the vote then he will resign which could lead to euro weakness.
Brexit Supreme Court hearing – UK Prime Minister is set to address the Supreme court as the High Court ruled the PM does not have the power to invoke Article50 on her own and she is needs parliament approval. The decision itself is not until January so its difficult to predict if he hearing will have any impact on GBPEUR exchange rates.
ECB Quantitative easing program – Many economists believe the ECB will extend the Q.E program. It was only last week two leading ECB officials stated the Eurozone economy needs ultra loose monetary policy which in my opinion cements the EU will make the extension. Past history tells us an extension would be euro negative.
US Interest rate decision – 12 months ago the FED exclaimed they would potentially hike interest rates 4 times throughout 2016 however interest rates have been unchanged at 0.5%. Now that the Presidential election is over there is a good chance interest rates will be hikes. If this is the case we could see a sell of euros to buy US dollars and therefore GBPEUR could fall.
All in all I believe there is a good chance rates for buying euros will improve throughout December.
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