This Euro exchange rate update discusses the latest news related to the UKs exit from the EU, as well as other events that could impact GBP/EUR rates.

Donald Tusk hints at Article 50

Donald Tusk has indicated that Theresa May will look to leave the EU in January or February 2017. This would then set off a two year countdown to the UK’s exit.

Donald Tusk has indicated that the European Union are well prepared for such negotiations to start to take place and that the EU wanted to secure the best possible deal with UK whilst obviously preserving its own interests.

It could be said that the UK will want to keep talks and scaremongering going as long as possible. Once the UK triggers Article 50 it will then be on a tightrope with potential loss of access to its main export market. This could be the reason why negotiations are expected to be held behind closed doors.

Italian Prime Minster causes stir and further doubts about Italy’s place in the EU

At the same summit at where Theresa May is said to have told Donald Tusk when the UK will be leaving the EU, the Italian Prime Minister said that he could not agree with the Summit’s view on growth and immigration and as a result did not join French PM Francois Hollande or Angela Merkel, the German PM as he did not share their positions.

This is further fuel for the fire that after the UK’s decision to leave the EU, other nations would follow suit. This comes amidst announcements that Italy would hold a referendum this autumn to change the laws regarding the power of the Italian government, in short. The worrying part for the EU is that if Renzi, the Italian PM loses, he has vowed to quit, which would lead to a general election which could mean that the extreme political party 5 stars could be elected. Although some time away it is important to be in contact with your account manager here to be kept informed of how political events could affect your currency purchase.

Mario Draghi’s speech and the effect on the Euro

For any clients with a Euro requirement, this week I would be keeping a close eye on Mario Draghi’s (Head of the European Central Bank) speech on Thursday. Past trends have shown us that when Draghi speaks, GBP/EUR rates can swing drastically.

On Friday, the first readings of the Euro area manufacturing and services purchasing managers indices are also due. These data releases combined have the capability to move Euro rates. With both Draghi’s speech and important data releases expected, I would suggest being in contact with your broker this week to discuss the options available to you.

Thank you for reading my Euro currency update, if you have any questions about Euro exchange rates I would be more than happy to discuss them, please feel free to email me at lme@currencies.co.uk.

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