The ECB kept interest rates steady yesterday at 0.25% during their meeting yesterday in spite of inflation only coming in at 0.5%. With worries surrounding whether the Eurozone could experience deflation it is rumoured that the ECB will be forced fairly soon to amend monetary policy in the form of further Quantitative Easing. ECB President Mario Draghi made it clear that action could be taken if the current problems continue.
The single currency weakened following the comments yesterday afternoon and we could see Sterling continue to trade higher during today’s trading session. European Retail Sales came in much better than expected but it was Mario Draghi’s speech that determined the movement for exchange rates.
One of the biggest currency movers of the month comes inteh form of US Non-Farm Payroll data which comes out at 130pm today. I think the news could come out very strong and if so we could see Dollar strength and Euro weakness leading to higher exchange rates for Sterling vs Euro.
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