07062016 Euro Forecast

The British pound to euro exchange rate continues to be increasingly volatile as fears of a UK Brexit from the European Union becomes more popular amongst investors. As of 07:30 GMT this morning, one UK pound exchanged 1.2783 euros, or 0.43% higher (GBP/EUR).

Most banks, investors, insurers and fund managers have voiced their fears about the prospect of Brexit and the impact it could have on the value of the UK pound, however the value of the euro could eventually be the currency taking the biggest hit.

“The market has become too comfortable with its things will work out all right approach. It would be far less prepared for a Brexit outcome than for Remain.” said Ulrich Leuchtmann, an analyst at Commerzbank.

In fact, A Brexit vote in this month’s EU referendum would set the disintegration of the European Union in motion, according to UKIP’s Nigel Farage.

Farage was discussing the prospects and outcomes of a Brexit result in the referendum during an interview with the Financial Times newspaper. He predicted other leaders within the EU will intervene to do whatever they can to stop Britain leaving because Brexit would be the first domino in the rest of their union disintegrating.

Meanwhile, Jim Mellon, the investor who correctly predicted the last economic recession, now forecasts years of turbulence for the European Union and the eventual breakup of the euro currency. Mellon sets out what he says are the clear reasons for the impending collapse, explaining that France and Italy are in debt traps, meaning the are not able to grow their way out of evermore expanding debts.

Structural reforms are not available to a French government prevented from employing such measures by striking workers, and in Italy the banks are in perilous trouble. For these reasons, Mellon says “France and Italy are probably going to be the key factors in the implosion of the euro-zone.”

With regards to GBP/EUR exchange rates, the value of UK pound already reflects what the market thinks of Brexit, but the value of the euro is as of yet to be fully realised.