The recently formed Italian Government has confirmed earlier in the week that despite their being Eurosceptics, Italy will continue to the use the Euro which benefitted the single currency. The Euro report below discusses this and other factors currently affecting EUR, with the table below showing the difference in Euros you could have achieved when buying £200,000.00 during the high and low points of the past month.

Currency Pair% ChangeDifference on £200,000
GBP/EUR0.5%€1137.08
Italian Budget Causes Panic for Euro

All eyes on the ECB meeting next Thursday

Despite coming under pressure recently, the Euro has had a good couple of days against the Pound owing to both hopes of an APP (Asset Purchasing Plan) update, Sterling weakness and better news out of Italy.

Earlier in the week the newly formed Italian government confirmed that despite being Eurosceptics and generally regarded as populist, Italy plans to continuing using the Euro. This was welcome news for the EU and the Euro benefited slightly due to the news. On Wednesday the Euro strengthened further as during a speech from Peter Praet (chief economist of the European Central Bank) in Berlin, he alluded to the end of the ECB’s current Asset Purchasing Plan ‘being up for discussion next week’.

His hawkish tone was met well by the markets, and the Euro spiked across the board immediately. Those hoping for a stronger Euro should be weary of a disappointing speech from ECB President, Mario Draghi next week now as hopes are high of an update to the existing APP programme.

Will Italian Politics scupper the ECB’s plans?

Financial markets have been weary of the effect the new Italian government could have. The cost of borrowing funds in Italy has skyrocketed in recently and the Italian stockmarket came under heavy pressure as the government was being formed. Some economists think that owing to the uncertainty surrounding Italy at present, the ECB may be weary of announcing the end of its APP and therefore hold out to ensure the Italian political situation is stable.

Michel Barnier to speak in the UK later today

The European Union’s chief Brexit negotiator, Michel Barnier is in the UK today and will give a speech around 2pm. He’s already commented on the UK’s ‘backstop’ plans announced yesterday regarding the UK’s extended customs union arrangement. Any major updates later could move markets so it’s worth keeping an eye on them around this time.

The ECB meeting takes place on Thursday and begins at 13.30pm. It goes without saying that this is a key event in the Euro’s calendar, and our readers have plenty of time to make us aware of any transfers they’re planning.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.