Prime Minister David Cameron is currently working hard on a deal at the EU summit being held in Brussels in order to avoid Britain leaving the EU.
The draft agreement which involves curbing migration and safeguarding our financial system has not yet been agreed and I think whatever happens over night I do think that Cameron will get most of his wishes but like with any deal it won’t be perfect.
The PM actively wants the UK to stay in Britain and he would like to end the week with a positive result which means we could see a referendum called as early as June although he does have until the end of 2017 to announce the date.
Unless something catastrophic happens with the talks I think Cameron will come away with a positive result and if this happens we could see GBPEUR rates react extremely quickly and break above 1.30+.
The European Central Bank minutes showed that the Eurozone is worried about its recovery which could stall owing to the global slowdown.
There is a chance that the ECB could look at further Quantitative Easing in March and if this happens I expect the Euro to weaken as it may demonstrate that December’s extension may not have worked as well as planned.
Eurozone inflation has continued to fall since December 2015 and although global inflation has declined owing to the fall in oil prices this is still a big concern for the European Central Bank.
I predict that we’ll see a big movement for Sterling Euro exchange rates overnight depending whether the deal is agreed between the UK and the EU.
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