Today's Pound Sterling update discusses recent comments concerning the outcome of the EU Referendum and looks at factors that could affect GBP exchange rates this week.
Head of the International Monetary Fund Christine Lagarde at the end of last week suggested a Brexit for the UK would be “bad to very, very bad”. Lagarde then went on to say that she doesn’t believe there will be anything positive to come from a Leave victory.
Also adding once more to the debate was Boris Johnson who yesterday in an interview compared the EU’s aims to those of the Nazi leader implying they are trying to unify Europe.
There appears to be a trend forming that when major figures speak out against the Brexit idea the GBP/EUR rate increase. This happened on Friday as the rate increased to a day high above 1.27 after Lagarde’s comments. This was something also seen after Mario Draghi, President of the European Central Bank, told of the dangers of a Brexit last week.
There is plenty of data for Sterling with the Producer Price Index and Consumer Price Index to be delivered on Tuesday, both of which are key indicators for inflation levels. On Wednesday the unemployment rate is released along with average earnings. Finally on Thursday the Retail Sales for April will be released.
All of this data can cause major volatility if anything unexpected is released there could be significant market movements, make sure you’re in contact with your broker to benefit on any improvements in your favour. Due to the disruption from the Brexit campaign I believe there is a good chance that the data could be poor and GBP/EUR may be in the 1.25’s by the middle of the week.
For more information on what is likely to affect exchange rates this week, or to discuss the possibility following the EU Referendum call our trading floor on 01494 725 353 or email me at email@example.com.
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