Italian political issues appear to be the main driver for currencies so far this week

Pound to Euro Falls as Further COVID Restrictions Announced

The week so far has seen quite a lot of volatility for Sterling exchange rates, however the reasons for the Pound moving against most major currencies are not down to political or economic data from the U.K but actually mainly driven by Italian politics, Donald Trump and North Korea.

Italian politics has been one of the main focuses for the week for investors and speculators, as news broke earlier in the week that the two big winners from the election – Five Star and The League had failed to form a Government, this instantly led to a drop in the value of the Euro and also for all of the perceived ‘riskier’ currencies, for example the Australian Dollar and the New Zealand Dollar.

As the week has progressed it does appear that the heightened uncertainty has lifted and only just this afternoon the two groups had agreed to give the matter more time and that they would once again continue talks and try to come to a positive conclusion so that they can move forward together.

Due to this we saw GBP/EUR exchange rates drop back  down into the 1.13s and the Pound also lost ground against the riskier currencies once again too.

The main key piece of data left for the U.K this week is manufacturing data due out on Friday morning at 09:30am, we do however have European unemployment and inflation figures out tomorrow morning, and also Non-Farm payroll data from the U.S on Friday lunchtime at 13:30pm.

Non-farm payroll data can impact all major currencies as it has an effect on global attitude to risk, so be sure to keep a keen eye on the market on Friday afternoon to see what impact this has had.

If you do not have time to watch the markets closely and the broker or bank you currently use does not do this for you then it may be time to change. If you would like my assistance with your exchange, both in terms of getting the best exchange rate and also helping you take advantage of the timing of the transfer when spikes occur then feel free to contact me (Daniel Wright) directly. You can email me on [email protected] and I will be more than happy to contact you personally for a no obligation discussion about your whole situation.