Mario Draghi's speech yesterday remained focused around the EU Referendum and the ECB's measures to stabilize the economy in the event of a Brexit. Positive EU data has come to light but has been overshadowed by tomorrow's major event.
Yesterday morning ZEW (Zentrum für Europäische Wirtschaftsforschung) released their survey of economic sentiment for June. The results came out better than the previous month, showing increased investor sentiment in the Eurozone, however this did little to affect GBP/EUR rates and was once again overshadowed by the on-going EU Referendum debates and discussions taking place in the UK.
President of the European Central Bank (ECB), Mario Draghi spoke yesterday afternoon and told the European Parliament that he is ready to take whatever action necessary if Britain votes to leave the EU in tomorrow’s Referendum. He said that the European economy gained at the beginning of this year, but due to global economic risks and uncertainty he is still poised ready to use all instruments available to him if required, no matter what the outcome in the Referendum.
This morning at 8am sees the next non-monetary policy’s ECB meeting, which may give us more of an idea of what their plans could be if the UK vote to leave the EU (a Brexit).
Tomorrow sees the release of Markit Services PMI and Manufacturing data, which is followed by the Long Term Refinancing Operation (LTRO) update. The ECB last announced in March that they would be adding €7.34bn in LTRO’s, which is where the ECB lends money to banks within the Eurozone at very low interest rates to boost cash flow in the market, so it will be interesting to see what the next stage of this operation will be.
These data releases are unlikely to have much of an influence over the currency markets in such a volatile period, and so all eyes will be focussed on any further Referendum news between now and the main announcement on Friday.
Tomorrows EU Referendum has the potential to move exchange rates either way depending on the outcome of the vote. Therefore, we recommend you speak to one of our brokers today to discuss your options. Call us on 01494 725 353 or email firstname.lastname@example.org.
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