This last week or two has seen a great deal of focus on Italy and their latest budget plans which are due to be released in detail on 15th October.

News on the wires over the past few days has suggested that Italy will be looking to submit a deficit target of 2.4% which will not be taken well by the EU.

Currency Pair% Change in 1 monthDifference on £200,000

Yesterday Italy made concessions and tried to soften the blow by suggesting that their deficit for 2020 and 2021 would be better.

Realistically though I would expect a little pressure on euro exchange rates in the coming weeks due to the current Italian situation, and on top of this we are also due ratings agencies reviews towards the end of the month. Moody’s current rating for Italy is sat at Baa2 with a negative outlook, which means that their credit risk is considered moderate and the ratings agent had previously planned to review this rating in early September.

This review and possible downgrade ended up being pushed back to the end of October to await news on Italy’s debt expectations and growth figures.

I would not be surprised to see a downgrade on the cards and with this we may see a little euro weakness and Italy will most likely be in the headlines once again.

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Little economic data to impact euro exchange rates

Aside from Italian or Brexit news, we have very little in terms of economic data due to come out over the rest of the week that is likely to directly impact euro exchange rates, this is also the case for most of next week.

With this in mind any political news or updates from Italy will have a heightened impact on exchange rates, and with political news much more sporadic and unpredictable it really does mean that you need to be following rates extremely closely in the coming weeks.

For the very latest movements or an up to date exchange rate for GBP/EUR feel free to contact us today on 01494 725353 and we will be more than happy to keep you up to date with the very latest action.

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