The Pound took some heavy losses yesterday, as the terrorist attacks in Brussels dominated headlines and poor inflation data also contributed towards the drop in the Pounds value against most the major currencies.
UK consumer prices advanced at just 0.3% YoY for the month of February, this figure was 0.1% below analysts’ expectations and markets reacted badly to the news.
I believe yesterday’s attacks in Brussels have negatively impacted GBP rates as support for a ‘Brexit’ is boosted after an attack like this, with migration and free movement within the Eurozone area dominating news headlines once again, with supporters of the ‘leave’ camp using this as an example leaving the EU as attacks like this become a regular occurrence.
The Euro was up almost 1% against the Pound yesterday as ‘Brexit’ fears gained off the back the attacks, and also the most recent ZEW Survey (a measure of institutional investor sentiment) figures came out better than expected which boosted sentiment within Europe and the Euro benefitted off the back of this.
News releases have been light today but tomorrow we have the LTRO (Long Term Refinancing Operation) figure is scheduled for release at 10.15 am. I’m expecting this to be the most important economic release for GBPEUR this week and we could expect further volatility off the back of it’s release.