As mentioned in the last few blogs sterling rates of exchange are very volatile making it a key time to keep an eye on the markets if you are looking to get the best prices. Over the weekend the next step in European Politics unravels as we have the Italian Election. Even though this has not been particularly covered recently it should not be dismissed. Italy is the 3rd largest economy in the Eurozone and has been the second worse performer since the crisis started after Greece. Their politics are mixed and there has not been a clear party leader for a while, most are expecting a coalition government being voted in which is not ideal but
will help the euro in comparison to the unknown currently. The stakes are simple:
“If there is no government in place in Italy how will it make any steps forward toward economic growth? If this happens expect GBPEUR to potentially go up in the immediate aftermath.”
Personally I imagine that there will not be a government in place on Monday morning giving euro buyers some relief. A think a coalition government will be formed quite quickly and with it more euro strength. So ignoring what has happened over the last week as markets are where they are, over the coming 3 trading sessions Italian Politics will rule currency markets and should be where all traders glare is fixed. Further afield if you have weeks to make a trade look at the UK GDP figures which is released in the middle of next week. As the UK has continued to miss the mark through February all traders selling pounds should continue to be wary. Feel free to review a popular blog about the UK’s slow demise here
If you have a trade to make and would like assistance with timing the trade feel free to contact me directly, Steve Eakins on the normal number or via email at [email protected]. It may be worth limiting risks on larger trades through the use of a limit or stop order over what is expected to be a turbulent weekend.