Jean Claude Trichet and the ECB raised interest rates yesterday to 1.5%. Following Trichet’s statement that they needed to take ‘strong vigilance’ towards inflation after last months meeting speculators had guessed that rates were going to be raised this month and the Euro managed to hold strong despite Sovereign debt.
As the raise was 0.25 points, just as the market expected there was no huge reaction from the market and strangely the Euro lost ground against Sterling, before the NIESR (National Institute of Economic ad Social Research) released UK GDP predictions for Q2 at only 0.1% for the UK which caused the Euro to rally nearly a cent.
The Euro has lost 0.3% against the US Dollar already this morning in what could be a very volatile day for this pairing. Watch out for US Non Farm Payrolls – considered by many to be the most volatile economic data set.
If you are looking to sell euros some predictions are for the Euro to strengthen but rates are very attractive against both GBP and the USD if you look back over last year. Alternatively if you are looking to buy you should be looking to jump on the back of a spike in the market from economic data releases. Get in touch if you are looking at transferring any currency in the short term and speak to the author directly on 0044 1494 787 451.