Euro Industrial production figures come in better than anticipated, the market's reaction is limited due to the attention being on the EU referendum.
The Euro received welcome news in the form of positive industrial production figures which came in considerably better than expected. Market reaction was limited as the markets appear to be preoccupied with the more pressing Brexit situation.
Whilst most of the focus of the British referendum on EU membership is naturally centred around the UK financial markets it is a fact the Eurozone is incredibly exposed to what happens here in Britain.
With much more volatility expected this could prove quite an issue for all the central banks around the word but in particular the Bank of England and European Central Bank. In a sign that Brexit is now being very seriously considered at the highest levels it has been reported that the ECB will do everything required to restore confidence and maintain adequate liquidity in the event of a Leave vote. Bank of England Governor Mark Carney will also be meeting ECB President Mario Draghi on 23rd June ahead of the outcome to be made 24th June. Other meetings have also been scheduled and there now appears to be a huge amount of planning behind the scenes. It is clear that this event carries huge risks for the currency markets and any clients with a Euro requirement would be wise to take the risk out of the market.
It is also worth pointing out that a vote to Leave could see other countries copy the British referendum which going forward could create all sorts of problems for the EU. In the medium term I would expect to see the Euro have some serious problems should Britain leave. Data is light in the Eurozone today with just trade balance data for April although inflation numbers tomorrow will be important considering the bad run the Eurozone has had of late.
The EU referendum has created a volatile market for GBPEUR and is likely to continue as we approach the 23rd of June. If you have a requirement for currency it may be a good time to discuss your options with one of our brokers. Call our trading floor on 01494 725 353 or email me here for further assistance.
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