UK shows signs of recovery while the Eurozone begins to feel the pressure…
Much to dismay of the Remain backers the UK’s economy rather than contracting is showing signs of growth and recovery. On Monday service sector PMI for the UK came out out far better than expected at 53.6 (Anything over 50 shows growth, under shows contraction), this coupled with the best manufacturing growth in 25 years has led to a resurgence in the Pound’s value heading back towards the 1.20’s (Inter Branch rate).
The UK’s economy is proving more resilient than most people expected even with trade talks with China stalling a generally positive outlook is shaping up.
The Eurozone on the other hand is beginning to feel the pinch with further woes concerning Italian banks and Greece’s debts resurfacing. All this is pointing to signs of contraction and any further stimulus introduced could cause further weakness for the Euro in the short term.
The danger from Brexit is far from over though, as we head into October and start official leaving proceedings we will get a better idea of what Britain outside the European Union will look like, this will likely cause more volatility in the markets. Therefore if you are traveling before the end of October, this month may provide some of the best opportunity’s for buying Euros.
In the short term this week Thursday may provide the best opportunity as Mario Draghi meets for the Eurozone’s Interest rate decision any further cuts or quantitative easing may produce sharp gains for the Pound.
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