The Bank of England today could cut interest rates in the wake of Brexit data, GBPEUR exchange rates may be heading further south, but for how long given the banking issues in the Eurozone?
Short term it looks like the pound could lose further value against the Euro because of the Bank of England’s interest rate decision (today at 12pm). Further to this the uncertainty surrounding Article 50 and the potential outcome of the ‘Brexit’ should also weigh down on the pound’s value. Therefore, there’s a good argument that GBPEUR exchange rates could continue to fall up until the end of the year towards the 1.10s.
However, the Italian banking system is under severe pressure due to debt, Greece’s debt repayments have been out of the spotlight because of the ‘Brexit’ and it’s only a matter of time until other countries announce they will be having referendums in regards to EU membership which could lead to other countries invoking Article 50.
If you are buying euros in the foreseeable future I would recommend trading before the expected falls. If you are selling euros to buy pounds I believe there are extra cents in it for you if you are prepared to hold off and gamble. However, at some stage the points I have made above should come too light and start to devalue the euro. Consequently, GBPEUR will therefore start to rise.
There are no economic data releases to look out for, for the remainder of the week. The next release that could have a major impact on the Euros is Q2 GDP numbers released next Friday at 10am. GDP is a measure of the total goods and services produced by the Eurozone and gives good indication to the strength of the economy. Any alteration from last month’s figure should cause market volatility.
For more information on how future events could affect your Euro requirements, call our trading floor on 01494 725 353.
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