The impact of the Italian Referendum on GBPEUR exchange rates (Dayle Littlejohn)

GBPEUR exchange rates finished the week at a 3 month high, due to investors selling off their euros in anticipation of the Italian referendum decision tomorrow morning.

Prime Minister Matteo Renzi wants to streamline parliament and take power away from the senate. His plans are to cut senate members from 315 to 100 which would in turn speed up the law making process. It’s important to note that Matteo Renzi has said he will resign if he loses.

The no campaign is being headed by anti-establishment party Five Star Movement, who want to hold a referendum in regards to keeping the euro, as many Italians are fed up that the economy is stagnant,

If the Prime Minister loses the vote then the Five Star Movement party led by Beppe Grillo would receive a boost from the prime minister’s defeat and I think there would be another referendum in the near future in regards to EU membership.

With polls suggesting there is a good chance the Prime Minister will lose the vote I expect the Euro will continue to lose value tomorrow and therefore GBPEUR exchange rates will break through 1.20.

For Euro buyers exchange rates have improved 10 cents in 4 weeks, which means a €200,000 purchase is now £15,000 cheaper!

If GBPEUR exchange rates improve further off the back of the Italian Referendum, euro buyers within the next 0-6 months should seriously consider taking advantage as I believe its only a matter of time until we know more about what Brexit will look like and therefore the pound will lose value.

If you are trading another currency pair that I have not covered, feel free to email me with the pair (GBPUSD, GBPAUD) the reason for the transfer (company invoice, property purchase) the timescales you are working to and I will respond with my forecast and the process of converting currency. My direct email address is [email protected] and I look forward to receiving your email.

If you are buying or selling euros in the upcoming weeks and are looking to achieve competitive rates of exchange whilst receiving regular economic information feel free to email me with your requirements or call the trading floor on 0044 1494 787478 and ask for Dayle Littlejohn.