Yesterday in Catalonia a referendum regarding Catalan independence treated as illegal and unrecognized by the Spanish authorities was held. In the course of this development, mass clashes of activists with the police took place. Against the backdrop of popular unrest, Spanish bonds and stocks began to fall. That, in turn, affected the rate of the euro.
In addition, ECB chief economist Peter Prat believes that inflation in the eurozone still has not reached the target mark, which is in the region of 2%.
After yesterday's release of the index of business activity in the manufacturing sector of the United Kingdom, the pound began a sharp decline. This week all three indices of business activity on the pound come out, therefore this week will be quite tense for the GBP. The index showed weak data, indicating a possible slowdown in activity in the construction sector and services.
Based on this data and technical analysis, we forecast further weakening of the British pound and the Euro.
