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Finally, and even if it seems contradictory, the political tensions in the euro zone give the ECB room to act, which sees the uncertainties weigh on its currency, especially as these tensions are often temporary.

The Brexit is a perfect example because the result of the vote of June 23 is now less and less likely to be followed by a real exit from the United Kingdom. The British Supreme Court is set to render public its decision regarding as to whether the Parliament of Westminster should give its approval for the triggering of Article 50. Needless to remind that the British parliament is mostly made up of Europhiles.

This is where the frontier between economics and politics lies, and referendums can always be largely overstepped and have only advisory value. For example, in the recent European history, the Greek referendum on austerity policies is another example. It can be considered as betrayal of the leftist party Syriza. In the same way, the Treaty of Lisbon in France in 2005 was approved by the French parliament although rejected, again, by referendum. The euro remains weak as a result of tensions in the euro area, and yet the ECB's quantitative easing programs have been inefficient so far.

Yann Quelenn
Market Analyst
Swissquote Bank

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