Buying Euro exchange rates showing very tentative rises (Joshua Privett)
GBP/EUR rose to new three month highs yesterday following the result of the Italian Referendum, briefly breaching 1.20 before falling back down into the 1.18’s as the situation continued to evolve and further news was released.
This referendum was an attempt to change the Italian constitution due to years of ineptitude which has resulted in 64 different governments in the space of 73 years. Whilst to outsiders the reforms seemed quite reasonable, the fact that the Italian Prime Minister Matteo Renzi stated he would resign if the reform did not go through is why markets were so worried.
The rise of the far right in Italy is a concern and Renzi’s departure paves the way from them to eventually gain power and hold their own Referendum of partnership in the EU, all of which could happen within 6 months. The ‘No’ vote was seen as another in a long-line now of protest votes which has riddled 2016.
Furthermore, this put pressure on the planned bailout of Italian Banks, who are dependent on Eurozone intervention to avoid falling into bankruptcy.
The Euro fell immediately yesterday as a knee jerk reaction to the news – however, the single currency then staged a substantial recovery following the later clarification that Renzi will not be resigning straight away. Instead it seems that Renzi will be waiting until later on in 2017 at the next Italian budget before doing so.
Much like when Theresa May took power and said Article 50 would wait until 2017 at the earliest, the Euro has benefited from the same buffer period afforded to the Pound.
The rest of this week will be governed by the evolving situation in the Supreme Court which is currently being streamed live, and markets will be reacting to each turn of phrase and change in momentum in the arguments given by solicitors.
I strongly recommend that anyone with a buying Euro requirement should contact me on firstname.lastname@example.org to discuss a strategy for your transfer to maximise your return on your Sterling holdings and to minimize your exposure to a volatile marketplace.
I have never had an issue beating the rates of exchange on offer elsewhere, and these current buying levels can be fixed in place for anyone planning a foreign currency transfer later this year.