Today saw Sterling hit 1.3850 against the Euro. This was caused by Mario Draghi the head of the ECB (European Central Bank) speech this afternoon. With Greece’s debt renegotiation being brushed under the carpet all eyes were on the ECB’s inflation forecast.
Quantitative Easing (QE) will come into play on Monday in an attempt to stimulate growth. However, Draghi has dropped the inflation forecast from 0.7% to zero for 2015. This was the cause for the spike in Sterling value. Clearly Draghi is trying to cover himself should QE not kick start a rise an inflation. He then went on to display the ECB’s faith in the program by upping the 2016 forecast from 1.3% to 1.5% and set 2017 at 1.8%. I feel this bullish tone very over optimistic considering the current state of affairs in the Eurozone.
If you wish to call me to discuss your currency requirements 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] .