Italy concerns help support GBP/EUR at 1.14+

Pound/Euro rates remain at €1.14+ today, but this is more to do with Euro weakness than any particular further strength in the value of Sterling. This is because the Euro remains under pressure due to concerns in Italy.  There are fears the Italy could become the next Greece and this is weighing on the single currency, reducing it in value and making it cheaper to buy.

What is happening in Italy?

The Italian government has set out a budget that is at odds with the EU. Their spending plans involves huge spending and this has sent Italian shares lower and has also weakened the Euro. Their plans put them at odds with the European Commission.  Borrowing and spending is a plan that the EU is not happy with, and right now Italy’s borrowing costs are already at a 5 year high.

There are concerns that if they go ahead with their plans, it will increase Italy’s soaring debt and put it on a path that requires a bail-out from the EU, much as we saw with Greece. This is the main reason for the GBP/EUR rate rising further today, while GBP/USD and other Sterling pairs have actually dropped slightly.

What next for Sterling/Euro exchange rates?

This week the only data of note is the Industrial and Manufacturing production figures due tomorrow morning. Brexit developments will be of more importance. Next week will be an important one as we have the EU summit starting on the 17th of October. There is a lot of pressure to agree a deal by their November meeting, and we could well see compromises made next week that could help smooth the path to a deal. If this proves to be the case, expect the Pound to rise further.

However it’s very important to remember that even if a deal is agreed, it needs to get voted through parliament, and I think that is going to be a big ask. There is much that could still de-rail the recent gains we have seen for the Pound.

Do you need to get the best exchange rates?

In these turbulent times, it’s more important than even to have a good currency broker on your side, that can help monitor the markets and keep you informed of any moves in your favour. We do this in addition to offering exceptional rates of exchange. You could save thousands by getting in touch for a quick chat.

Make an enquiry today

 

%d bloggers like this: