Sterling found more strength this afternoon despite worse than expected data in the morning. There is more respite for people looking to purchase Euros before the referendum potentially creating false confidence of the dangers of a Brexit.
For all the doom and gloom that keeps being written about Sterling is still maintaining its position, giving people a good window to buy that holiday money as the season opens.
Banks begin to prepare for the Worst
Lloyds and Barclays have declared they are preparing for the major volatility in the run-up to the Brexit by making themselves liquid, essentially making sure they have funds. Lloyds have called in much of their funding requirements for the year in the first few months to make sure they are completely protected. Whilst this is not an overly surprising situation for a bank, it does show the level of preparation going into the potential uncertainty.
EU Growth Forecast Data Tomorrow
Tomorrow the European Commission will release their latest growth forecasts which can cause major volatility. Many investors will be interested to see if there is any major change in the predictions for the year and if there is a downward change expect the GBP/EUR to move towards 1.28.
The EU has implemented a huge amount of fiscal policy changes in the last few months which will hopefully create a better economy. The ECB has used the most extreme measures to try to generate stimulus and if this doesn’t work, there is virtually nothing left that can be done. If you are looking to purchase Euro’s tomorrow could be the time.