Mario Draghi the head of the ECB ( European Central Bank ) announced yesterday that QE ( Quantitative Easing ) would begin on Monday. QE is essentially injecting borrowed money into an economy in the attempt to boost spending and in turn inflation. It is very difficult to measure the impact of QE and it is not a definite method of increasing inflation.
The main reason we have seen Sterling continue to strengthen over the Euro is Draghi’s change in the inflation forecast. It was revised down for 2015 from 0.7% to 0%. It maybe interpreted a ploy in order to give QE time to kick in, and with such a low estimate any growth could cause QE to be deemed a success in the ECB’s eyes. Although the following years estimates were far more bullish, the 2015 estimate does not fill me with optimism for the Eurozone.
If you wish to call me to discuss your currency requirements I would be happy to assist and help you trade at the optimum time and help you obtain a very favourable rate, please do get in touch by calling me on 01494 787478 and ask for Daniel Johnson, alternatively drop me an e-mail on [email protected] .