Ireland vote crucial for rates today.
Ireland today goes to the vote following a referendum being called on whether to comply with further cuts to reach targets set by the EU. A warning was given by their prime minister saying that a no vote would treble the cost of international borrowing to maintain the country’s public services and state jobs. This could have a large effect on GBPEUR exchange rates over the next 36
hours. For up to date information on this story or any other mentioned in this report, and how it could affect your position get in contact with me directly by filling in the enquiry form on the right hand side of this page.
Pound Euro – Spanish news
In a relatively quiet week pound exchange rates have remained fairly flat with little movement compared to the last 6 weeks, however I personally believe it is just the calm before the storm; I think the next few weeks will have some surprising news; everyone with a currency position should review their situation with a specialist asap. From tomorrow onwards all
eyes will again return to Greece and Spain with data expected to change exchange rates widely.
I think most specialists agree that it is the Spanish economy that will become the main story in the near future. Their Stock market is at a 20 year low, unemployment at record highs and their banking system is failing. Market sentiment weakened further yesterday as their 10-year bonds climbed to their highest level so far this year on Tuesday, approaching the critical 7%
threshold. It seems that the Bank of Spain is failing to convince investors that they will not need an international bailout
A majority of the problems have been a result of their property bubble popping, the Bank of Spain estimates it may have up to €180 billion in bad debt which many think may be more than the Eurozone can raise.
As a result I would expect GBPEUR to be range bound within 1.24-1.2570 over the next 7 days assuming no major surprises crop up. If you are looking at trading in the near future contact us today and we can pro-actively help you try and catch your target.
Italian Banks next in line?
Pressures over Eurozone debt also forced the Italian government to pay higher rates yesterday as their five years bonds climbed to 5.66%, compared with the 4.86% in April.
A rate above 7% is considered to be unsustainably high and in the past has resulted in Greece, Portugal and the Republic of Ireland receiving international bailouts.
If you have a currency transaction to carry out and wish to receive the very best rate of exchange on your transaction, fill in the contact form on the right hand side of this page and I will be more than happy to personally assist you.