The GBP/EUR paring has seen movement of over 3% since the start of last week, with current mid-market levels testing 1.13.
| Currency Pair | % Change in 1 month | Difference on £200,000 | |
|---|---|---|---|
 GBP |  EUR | 3.14% | €7,020 |
In monetary terms, transfers timed at the better levels could have achieved over €6000 more on a transfer of £200,000 in comparison to the lowest levels, and the sudden spike of almost 1 cent during yesterday’s trading highlights how important timing can be within a short period.
The current uncertainty in the markets provides opportunities for both buyers and sellers with interests in the GBP/EUR pairing, but it should be considered that holding out for slight short-term gains can be countered by sudden heavier losses.
Italian budget concerns affecting EUR sentiment?
In addition to Brexit’s influence on currency markets, clients planning transfers involving the GBP/EUR pairing should be considering the current developments surrounding the Italian budget, which appears to be a growing cause for concern.
It was announced this week that Brussels had officially rejected Italy’s amended budget proposal, which has opened the door for EU sanctions and increased tensions with the country’s populist Government.
The decision by the European Commission to reject the draft was hardly unexpected, since it had rejected a previous proposal only a week before, but the Italian Government has now found themselves in unknown waters and EU member states will now have a fortnight to decide whether to allow the commission to trigger the ‘excessive deficit procedure’ which could lead to fines. In the past however, both Germany and France have broken EU guidelines without financial penalties, but the current situation should not be taken for granted and could see EUR suffer as a consequence, with Italy being such an influential global economy.
Key Economic Data
Yesterday, European consumer confidence figures were announced at -3.9, the lowest since 2017 and -0.9 worse than expected.
This release saw investor sentiment in the single currency suffer and attention will turn to the German GDP and Eurozone Markit Purchasing managers Index (PMI) data released today, for signs of European improvement.
For more information, please contact your account manager here or contact our trading floor directly on 01494 725 353.
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