Eurozone PMI Data released yesterday was slightly lower than the expectation, following the recent trend of data releases that have disappointed. The Euro report discusses the apparent slow down in positive data compared to the end of last year and how this could impact the Euro. The table below shows the difference in Euros you could have acieved when buying £200,000.00 during the high and low points of the past week.
|Currency Pair||% Change||Difference on £200,000|
Yesterday morning the Eurozone Services PMI data missed the expectations by a small margin along with Retail Sales for the month of April. Over the past few month EU data has become something of a focus as the positive flurry towards the end of 2017 appears to be waring off. At this point if the UK was not planning to leave the EU you can’t help but think the problems facing the Single Currency would see the GBP/EUR rate trading into the 1.30’s.
Whilst the European Union is coming under pressures from its own economic performance the northern nations are still keeping the bloc treading above water. However any potential industrial concerns for the EU’s power house nations and it may not take long for concerns to increase. The New Italian Prime Minister Giuseppe Conte in his maiden speech to the parliament spoke of populist measures which he plans to push through quickly. Conte’s plans consisted of essentially introducing a benefits payment, along with cutting tax and curbing immigration.
There was however no mention of the Euro, which last week came under threat as markets faced the prospect of an anti-EU Finance Minister in Italy being brought into power.
The uncertainty surrounding Italy is whether or not the new government will challenge the current economic conditions, which following Conte’s speech look as if EU budget rules could be broken.
This could create something of a headache for other EU leaders who are currently under major pressure form their own countries to not have to pay any more funds to bailout Italy, whose debt is currently 130% of GDP. Over the next few months there could be significant Euro volatility and we have already seen evidence of this in the last few weeks.
If you’re looking to sell Euros holding out to the end of the year could mean you’re trading at a considerably less desirable level than the current rates. Make sure you’re in contact with your broker so you can be alerted to any movements in your favour.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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