Draghi's speech today is likely to be focused around the upcoming EU Referendum and measures to be taken in the event the UK withdraw from the EU. GBPEUR exchange rates are currently approaching the 1.30's despite concerns of a Brexit.
EUR sellers should be bracing themselves for increased volatility on the exchange this week, with all eyes focused on Thursday’s EU referendum. Yesterday’s move should act as a stark reminder of how volatile the market is at the moment and with momentum now building again for a Remain vote, those clients holding the single currency may well have missed their opportunity to trade at last week’s high.
Whilst it’s difficult to gauge exactly how the markets will react in the build-up to Thursday’s referendum, I do feel EUR sellers may get another spike. Uncertainty is likely to return before the votes are cast and this will likely put the Pound back under pressure. However, if we see another poll indicate that the Remain camp are holding, or increasing their lead then any aggressive EUR improvement is unlikely in my opinion.
Looking ahead and we have a speech from European Central Bank (ECB) president Mario Draghi today and this is likely to be key to any short-term improvement for the EUR. Draghi has been very bullish about the Eurozone’s economic recovery late but has been heading words of caution regarding a possible Brexit and the negative effect this will have not only on the Eurozone but the global economy. Any positive comments could curb any further EUR losses and with an Economic Sentiment survey also due out, it could be a busy day for EUR sellers.
Tomorrow sees the release of Consumer Confidence figures, followed by Manufacturing & Services data on Thursday. Whilst it is likely to be Thursday’s EU referendum that drives most of the market value this week, EUR should keep a close eye on the aforementioned releases.
GBPEUR exchange rates are likely to become very volatile over the next couple of days which could present opportunities for both buyers and sellers. Speak to one of our brokers today on 01494 725 353 to discuss your options or email me here.
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