Food For Thought on The EUR As Ireland Gets Ready To Vote Again On The Lisbon Treaty

This Oct. 2nd will be ‘the’ day of reckoning for Euro-land. Ireland will be holding its 2nd referendum on the Lisbon Treaty of EU institutional reforms. The Irish public overwhelmingly rejected it on the 1st go around in June 2008 (53.4% said ‘No’ and 46.6% said ‘Yes’). The initial impact was rather benign for the EUR trading countries, but, within a matter of month’s investors and dealers turned risk adverse. The EUR had a similar experience in 2005 when the French and the Dutch rejected. There have always been questions about the cohesiveness of the EURO members, whom have such a diverse culture and political make up. Currently consensus expects the ‘Yes’ vote to prevail. However, recent polls shows that 46% would vote ‘Yes’, a drop of 8-points since May, while 29% say they would vote ‘No’, an increase of 1-point. More importantly, the number of people in the ‘Don’t Know’ category has increased by 7-points to 25%. If the ‘No’s’ prevail, then once again the Lisbon treaty will not be ratified by the EU. End result, the European Union will be thrown into confusion about how it should be governed by its member states. No doubt investors will shy away from owning the EUR and question the sustainability of the Union. We have 4-weeks till we know!

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell