020 7898 0500The euro won the day again as it strengthened against the US dollar and sterling. Tellingly, this wasn’t because of any positive news from the eurozone, more because of concerns surrounding the UK’s position in Brexit negotiations. It appears that the single currency is seen as a fairly safe bet of late and the IMF’s recent raising of its eurozone growth forecasts suggests its economy is strong.
The EU negotiators appear to have the upper hand in the Brexit talks. The UK’s position is still unclear and until an exit bill is agreed, no talks on future arrangements seem feasible. The markets will be keen to see some form of progress soon as a lack of clarity creates uncertainty. As we have seen, uncertainty gives rise to potential for huge currency volatility. The question is when will all of this be sorted out?
Today sees the release of the German inflation rate. It is expected to stay at 1.8% and, as the eurozone’s largest economy, any reading above or below expectations could cause some currency movement.
