Today is a very significant day as there will be major volatility in the currency markets on the back of news from the European Central Banks President, Mario Draghi. There could be a further drop to the current negative interest rates which Mario Draghi has suggested he has observed in other economies around the world, if he believes they have worked he may introduce them to the EU. More likely however there could be around €10bn of further quantitative easing introduced which is the central bank purchasing of Government debts essentially pumping money into the economy.
How does the ECB Decision today effect you?
There is a general expectation that the GBP/EUR rate will fall as we move towards the BREXIT vote. This is based on the evidence from previous votes such as the Scottish Independence referendum and the UK General Election where there was a huge Sterling sell-off. What the decision on Thursday may offer is an opportunity to purchase Euro’s at a good rate before the rate is affected by the Brexit.
On the flip side the last time we saw Mario Draghi make a big statement about the actions the ECB could take the Euro strengthened by 3 cents. This is because the ECB are seen to be proactive to improving the economy trying to make the conditions more favorable for Eurozone businesses.
If you are looking to complete a Sterling Euro trade I strongly advise getting in touch so you’re in a position to capitalise should we see the rates move.
Please contact me if you would like to find out more information regarding the GBP/EUR rate. I am happy to provide you with assistance and achieve the best rates when changing currencies, please email me at [email protected].