The Euro continues to go from strength to strength post-Brexit but worrying signs from the Italian banks should not be overlooked.

Manufacturing data boosts the Euro

Following on from the positive news from the European bank’s stress test over the weekend, manufacturing data released yesterday for July was 0.1 better than experts had predicted. This helped to ease fears surrounding banking sector although there are some worrying warning signal, especially from the Italian and Greek banks that shouldn’t be overlooked. In contrasting news, this is the 37th straight month of expansion for manufacturing in the Eurozone. This coupled with CPI (consumer price index) data on Friday show positive signs for the Eurozone.

In my opinion, this data release signals that the EU referendum and the effects of the Brexit are yet to be felt throughout the manufacturing industry. I personally believe that readers should be asking themselves; how long will this last? As the Eurozone was the UK’s largest trading partner the lag from the downturn in business conditions in the UK could start to affect the Eurozone’s data releases in the up and coming months.

Clients with a Euro based requirement

This week is set to be a volatile week for any clients with a Euro based requirement. In terms of data for the Eurozone, PPI (Producer Price Index) is set to be released today. This is set to show a decline which could be negative for the Euro.

The main driver for the GBPEUR rate will be the Bank of England’s Interest rate decision on Thursday. Any clients looking at selling Euros to buy Sterling should be in regular contact with their broker leading up to and during the event. If the BoE do decide to cut interest rates, with reports hinting that many investors are almost certain a rate cut will take place. If this does occur, this could provide Euro sellers with fantastic opportunities.

For more information on how releases this week could impact your currency exchange needs, speak to us on 01494 725 353.


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