Currencies movement affected by Italian politics

31 May, 2018

Pratheep Prabaharan

There’s been a lot of movement for sterling exchange rates this week and the reason for the pound moving against most major currencies are mainly driven by Italian politics.

Earlier this week, the two winners from the election in Italy – Five Star and The League failed to form a Government and as a result, the value of the euro dropped.  As the week progressed, the groups had agreed to give it more time to try and come to a positive conclusion so they can move forward together.  This caused GBP/EUR exchange rates to drop around 1%. Saying that, the rate is only around 1% less than the best rate we’ve had in 12 months and better than around 7% since September 2017.

If you have a property purchase and need to buy euros then this may be the time to secure funds.  The key data to look out for this morning is European unemployment and inflation figures.  Tomorrow at 9.30am the manufacturing data for the UK will be released followed by Non-Farm payroll data from the US at 1.30pm.  It’s a volatile market and the rates could fluctuate either way depending on the outcome of the data being released.

If you want to take advantage of the GBP/EUR rate whilst still holding strong then get in touch with your Account Manager to discuss your requirements and the best option to save money on your currency transfer.