All eyes have been firmly focused on some of the main constituents of the European Union for the past few days, notably the European Council and the European Central Bank (ECB). The ECB met yesterday for their six-weekly monetary policy meeting, and according to the minutes of the meeting Mario Draghi has won support for further financial stimulus next month. The current worldwide downside risks such as slowing world economic growth and low oil and commodity prices are of great concern to the bank, and they are willing take any necessary action to bolster the Eurozone. The release of these minutes appeared to bring the GBP/EUR rate down a notch following the rise yesterday morning that I believe had been caused by market anticipation of the event.
The other major event happening right now is the meeting of European Council discussing the UK’s place in the EU and the reforms that David Cameron is battling for the United Kingdom. According to EC President Donald Tusk, there has been “some progress” but “a lot still remains to be done”. It is apparent that all members countries wish for the UK to remain in the EU but some have more concerns about the specific reforms than others.
I think we can expect to some significant volatility in the GBP/EUR rate over the course of today until the meeting concludes. If a deal is agreed between all the members, then Mr Cameron will head back home to get the UK government to agree on its position on remaining within the EU, and then a referendum will likely be called for the UK population to have their vote. I expect the run in to this referendum will keep volatility up regarding Sterling and the Euro. If you have a currency transaction to undertake, either today or in the coming months then I think it would be extremely prudent to get in touch with your broker who can provide expert advice on how to best manage your needs.
If you don’t currently have a broker, then please do not hesitate to contact me at [email protected] where I will gladly respond to you and be able to run through exactly how we can assist you, both in terms of timing your transfer and getting you the very best, award winning rates of exchange. Jonathan Worrall
