Sterling Euro exchange rates have remained relatively stable during today’s trading session as the currency markets wait for a key piece of economic data in the form of UK GDP data for the second quarter due out on Wednesday morning.
As this release will include the run up to and the subsequent Brexit vote this could be a real catalyst for change and if the data comes out low then we could see some very rapid losses for Sterling vs the Euro.
Clearly foreign investment over the last few weeks has been relatively low as it would have been difficult investing in the UK with the uncertainty of the EU referendum.
According to the latest Purchasing Manager’s Index the UK’s economic activity is now at its lowest level since 2009 with the figure published of 47.7 with anything below 50 representing contraction.
Later this week on Friday the European Banking Authority will look at a total of 51 banks across Europe including British banks and the likelihood is that we’ll see some concerns arising from the Italian banking sector which has come under pressure since the start of 2016.
The announcement of the stress tests will take place at 9pm UK time on Friday night and as the report is released outside of usual business hours I think this time has been chosen purposely in order to reduce market volatility.
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