Sterling vs Euro exchange rates have continued to show signs of improvements as the Eurozone continues to struggle politically.
Clearly the political scene in the UK is not in great shape at the moment with the uncertainty caused by the Article 50 issue but now the focus is moving to what is currently happening on the continent.
The Italian referendum which is looking at constitutional reform is taking place this weekend and at the moment the polls appear to have Renzi in the lead.
If, however, he does not get the ruling that he’s looking for we could see the Euro fall against Sterling very quickly as he’s also previously announced that he may resign. The polls currently have Renzi’s party in the lead with 53.5% of the vote but we all know that polls during 2016 have not so far been very reliable.
We have seen a change in the voting patterns during the course of this year first of all with the Brexit vote and then Trump so we could see another surprise this weekend.
If Renzi doesn’t get his way and does end up resigning then we could see GBPEUR rates take a dramatic upturn by Monday. If you’re in the process of buying Euros then this could be the opportunity to see rates go higher but as always with the fx markets they are impossible to predict.
Tomorrow US non-farm payroll data is due out and we could see further Dollar strength and Euro weakness if the data is positive as it will provide further ammunition for an interest rate increase when the US Federal Reserve meet on December 14th.
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