Catalonia Vote Tomorrow
The people of Catalonia tomorrow will go to the polls to vote on their next Government leader. In October this year Carles Puigdemont declared Independence for the region however the Government of Spain declared the referendum as illegal and since that point Puigdemont has been in exile over in Belgium.
At the time of the independence announcement the Euro did lose ground against Sterling and depending on how the vote goes at the end of this week, there could be volatility. Puigdemont has been campaigning through video feeds and is still thought to be the favourite to win the vote, even though he may have to form a coalition with another pro-independence party. There will be exit polls tomorrow with could provide a early indication, however the race is close and there could be volatility tomorrow.
Euro Makes Gains This Afternoon
This afternoon Sterling has lost ground against the Euro with the rate falling to 1.125 at the lowest point today. This has mainly been down to Theresa May suggesting Brexit could be delayed due to exceptional circumstances, May also faced Jeremy Corbyn in the final Prime Ministers Questions for 2017.
The EU today also made several announcements on the Brexit negotiations, with the transition period from Brexit to the new arrangement not moving past 31st December 2020. This announcement was also coupled with the Bank of England unveiling plans to allow European Banks to operate in London under existing rules. The UK Government are rightly totally committed to trying to keep as many European businesses and banks in the UK. Over the course of the next few months negotiations are going to move onto the trade talks and should there be positive progress Sterling could start to make gains. The uncertainty over the next few days could certainly help the GBP/EUR rate move back into the 1.14’s with optimism for Euro buyers as Brexit talks continue.