Brexit on Euro

Euro dominoThe value of the single currency has been under a spot light recently, with the official triggering of the UK leaving only last week, many have been trying to second guess what impact it would have on the Euros value. Many member states are now starting to show their ‘cards’ and their priorities from the negotiations steps which will now follow. The methodology for the negotiations were set out only on Friday and the first meeting to start procedures take place at the end of this month.

I am personally of an opinion that there will be a series of mixed messages coming from these. Independently member states, I would imagine, will want things to be as clear as possible so they can look after the interests of both business trade and nationals rights. Whereas communally they will want to present a challenging, time consuming and expensive process to put of any other member states off following the UK’s lead.

At this respectively early stage watch out for speeches from key member states as these could very much change and define how hard a Brexit the UK will have and therefore the impact on the GBP/EUR rate.

EU members budget deficits

It has been widely documented that the challenge of a single EU is implanting one policy across all member states who are all very different. One prime example of this challenge is the wide variation of what each member state is happy to accept when approving budget deficit levels. Greece has one of the worst which will be no surprise with Portugal one of the lowest. Portugal reported its lowest budget deficit in more than 40 years for 2016, well under the limit set by EU fiscal rules. How can you implement a financial policy on all member states when they are all so different?

European unemployment figures in focus

Today all clients with a Euro exposure should be watching for the latest employment figures which are released at 11 am today. We also have Production Price Index and Manufacturing figures released this morning. All are expected to show a fall in activity levels so most expect the Euro to become cheaper to buy as a result. This is in contrast to the latest PMI index which showed recently that businesses grew at the fastest rate in nearly 6 years across the Euro area in March.

If you have a requirement for the Euro in the coming days and weeks, be sure to stay in regular contact with your broker to ensure you don’t miss out on any major market movements. Call our trading floor on 01494 725 353 or email me at hse@currencies.co.uk if you are yet to trade with us and would like further information on what could impact exchange rates in the near term.

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