The Pound has made some huge gains vs the Euro during today’s trading session after the latest European Central Bank meeting.
The central bank has announced that it will be ending its QE programme in December and reducing the currently monthly spend of €30bn in September to €15bn until the end of the year.
The central bank has also said that it is likely that they will be keeping interest rates on hold as the growth in the first quarter is at 0.4% and they have also downgraded growth for this year and this is why we have seen the Euro have its worst day of the year against the Pound so far.
ECB President Mario Draghi also said that the bank have not decided when they may look to raise rates owing to the rise in geopolitical tensions. However, some have suggested that a rate hike could potentially occur in a year’s time which is hardly anything to get excited about.
The Pound started the day on the front foot after a big surprise with UK Retail Sales which came out much better than expected. Figures for the year showed 3.9% year on year compared to the estimate of 2.4% and this gave the Pound an unexpected boost against a number of different currencies including vs the Euro.
Tomorrow morning the Eurozone will announce the latest set of inflation data and I think we could see further weakness for the Euro as it is likely that the ECB already have these figures.
If you are looking to buy Euros at the moment it may be worth taking advantage of these current levels as the Bank of England are due to meet next Thursday and therefore these gains for the Pound vs the Euro could be short lived.
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