A combination of factors has finally, after 4 weeks, caused buying Euro rates to flutter out of its recent mooring at 1.129-1.1430, but the decider was new information about potential collaboration between the Trump campaign and Russian officials.
Why are we addressing events in America? Anything that impacts the US Dollar has a ripple effect on global currency exchange rates. This is more exaggerated when the Euro is discussed because USD/EUR is the most heavily traded currency pairing in the world, so movements in one currency tends to have the opposite effect in the other as capital is moved global into, or away from, the other currency.
There was concerning news out in the US today. This could be the veritable ‘smoking gun’ which ties Donald Trump’s campaign efforts with similar efforts from the Russian Government to get him elected.
An email chain confirmed that Donald Trump Jr, alongside two other key officials from then-candidate Trump’s inner circle met with a Russian official in an attempt to gain information to undermine Hillary Clinton’s campaign.
Collusion is the key word here, given that there was knowledge here that they knew they were meeting with a Russian official, despite previous denials to the contrary.
Reports of ‘lawyering up’ are rife, and, surprisingly, now President Trump has yet to deny anything on Twitter.
Alongside some lacklustre comments from Bank of England members about a potential rate hike in the UK economy, there is a stronger argument emerging that EUR/GBP will be gaining ground in the near term. Euro sellers rejoice, but buyers may be wise to consider buying their currency now.
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