Leaked documents showed the 5-Star and far-right League, who are forming a coalition, were seeking measures which may ultimately destabilise the Euro.

European Stocks drops on Italian concerns

The fear that the parties were considering a program which might see Italy leave the Euro or even the EU were yesterday flatly ruled out by 5-Star sources, the Euro remains on the back foot however. Spending plans that may cost billions of Euros including increasing pension and welfare payments would set the Italian economy on a worrying direction.

The comments that a Euro exit is not on the agenda helped to stem the Euro’s losses but it remains on the weaker side. It had dropped sharply against the pound and US dollar but these movements have been contained for now.

German Inflation data already released at 7 am this morning has given the Euro a slight boost, coming in slightly higher than expected presenting a small respite for Euro sellers.

In the table below you’ll see high to low GBP/EUR exchange rate movement when exchanging £200,000 to Euros in the last week.

Currency Pair% ChangeDifference on £200,000
GBPEUR1.32%€3,040

GBPEUR 1.5 cents off the best in 1 year

Italian concerns have helped GBPEUR rise to very close to the best levels in almost 1 year, presenting clients who missed the boat last week with a second chance. The pound is still in a very tricky place with outstanding questions over Brexit and the UK economy and interest rates.

Next week are key UK data releases which could have a dramatic effect on the pound including GDP which so heavily knocked GBPEUR lower at the end of April.

The pain experienced for clients buying Euros with pounds since the 1.08 interbank lows back in August 2017 seem a distant memory but are a good reminder of how quickly market sentiments can change.

If you are buying Euros with Pounds the current improvements should be too readily dismissed in the hope of significantly better levels in the coming weeks and months.

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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.