The Euro fell another half a percent against the Pound yesterday, after news broke over the weekend that the expected Italian coalition government is no longer looking likely to form.
There were expectations that the five star movement and League would form the coalition over the weekend, but the Italian President Sergio Mattarella cancelled talks after the coalition put forward Eurosceptic, Paolo Savona for finance minister. The markets were already weary of the unfolding’s in Italy due to the populist and Eurosceptic leanings, along with plans to cut back on debt whilst increasing government spending.
The Euro weakness is across the board of major currency pairs as opposed to just between the Pound and Euro, and this is something those hoping for a stronger Euro should be aware of.
Italian consumer confidence levels have also dropped off recently which hasn’t helped the Euros value either, and the cost of borrowing has also surged in recent weeks.
GBP/EUR is now trading roughly within a cent from its highest levels of the last year. The potential downsides for the Pound mostly surround whether a Brexit deal will be agreed in time to keep with the Brexit schedule, and also whether or not the economy justifies an interest rate hike later in the year as many are expecting.
The Pound has predominantly been driven by politics relating to Brexit for some time now, and those hoping for a stronger Pound should be aware of this.
If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on [email protected] and I will endeavour to get back to you as soon as I can.