Today is a key day for the ECB

Euro Suffers Losses to a Strong US Dollar and a Resilient Pound Sterling

As regular readers will be aware the EUROPEAN CENTRAL BANK is widely expected to bring in new policies later today to lower borrowing costs and push up Inflation. This could be a number of new policies including; lowering the central rate from the already record low of 0.25%, changing the overnight interest rate level to negative to get the banks’ lending to each other, introducing a cheaper bond for the banks giving them cheaper borrowing costs on the basis they loan more to the public, or introduce new leaning targets for the banks.  As a result of the above options and the multiple routes the bank could pick rates will be difficult to forecast. Plus we don’t know how much has already been priced in the market in the run up to today’s market.  My view – well I don’t know what will happen but talking about how the markets will react I expect to see GBPEUR either climb a little or fall al lot if the bank miss expectation.

Plus there is the potential that the bank of England get into the mix, they also meet today and even though no change to the central price will be released they could potentially bring forward forecasts to when they will start to raise interest rates.  This would push rates up in the favour of the Pound if confirmed.

For more information, forecasts updates, live quotations or to discuss your situation with an expert contact the author – STEVE EAKINS – via email at [email protected]