Sterling may have benefited from Italy’s current political situation having clawed back some ground on the euro last week. The collapse of Italy’s ruling coalition paves the way for different scenarios to arise, new elections or extension of the current collation could all affect how the euro recovers.

Italy is due to decide on Monday when to hold a no confidence vote after Deputy Prime Minister Matteo Salvini threatened to bring down Italy’s coalition government. Historically any political uncertainty can cause weakness within a currency so if you are looking to sell euros you may wish to get in contact with your account manager here at FCD for a currency update.

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Germany's poor performance and what it means for Europe

Germany's Gross Domestic Product shrank 0.1% in the second quarter of the year, confirming the poor performance of the Germany economy. Hit by rising Trade fears, the slowdown of Chinese imports and homegrown industrial and economic problems have all attributed to the poor result for Germany. Although the decline in the GDP was expected it does put Germany at a risk of a recession this year and contrasts with the overall eurozone’s 0.2% GDP growth in the three months to June.

Due to the poor GDP figure another round of Monetary easing could be announced at The ECB meeting in September. So look for signs of Euro weakness in the coming weeks.

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