Rumours are flying around that the UK government is gearing up to trigger Article 50 imminently. Some suggestions are that it may even happen as early as tomorrow but personally I would be surprised to see this happen just yet.
The Dutch elections are due to take place on Wednesday with far-Right party leader Geert Wilders the current favourite to win.
However, even if he does it is unlikely that he will be able to maintain the position as the other parties involved have refused to join him in a coalition. Therefore, what was previously thought as a negative for the Eurozone may not happen and we could indeed then see the Euro strengthen against Sterling.
The Scottish National Party are due to hold a conference on Saturday and if Article 50 has been triggered before then it will give Sturgeon the mandate to ask for another Scottish referendum as the majority vote in Scotland was to stay in the European Union. Therefore, another reason why Theresa May might delay the announcement.
There is also a huge amount of economic data due out this week both in the Eurozone and the UK. Tomorrow morning brings with it the release of German inflation data and as the Eurozone’s biggest economy any positive signs could cause Euro strength vs the Pound. Eurozone Industrial Production data is also published tomorrow morning.
On Wednesday we could see one of the most volatile days of the week with UK unemployment data as well as Average Earnings. Unemployment has been very positive recently but last month’s average earnings fell so a repeat of the same could cause further problems for the Pound.
Overall the main influence for GBPEUR exchange rates will come in the form of when Article 50 will be triggered as this is likely to cause large swings on the currency markets.
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