With the ECB set to release their latest interest rate decision this afternoon and President Mario Draghi’s press conference shortly after today could dictate euro exchange rates for the weeks ahead.
With interest rates at 0% I would be surprised to see any further cuts from the European Central Bank however all eyes will turn to Mr Draghi and his future plans in regards to the Quantitative Easing program that finishes March 2017.
Quantitative Easing is where a central bank buys assets which are normally The central bank introduces a new money supply into the economy. The theory behind quantitative easing is to stimulate the economy however the currency does lose value.
If Mr Draghi does decide to extend the Q.E program I would expect major euro weakness however in my opinion an extension is very unlikely until early next year.
Short term I expect the ECB to keep their cards close to their chests and bat off questions from reporters about any extensions. Therefore the major talking point that should continue to impact GBPEUR exchange rates should be the Brexit.
UK Prime Minister has stated a Brexit will occur in March 2017 and this has been the main reason why the pound has lost value over the last two weeks. Looking ahead I expect the pound to continue to devalue and GBPEUR exchange rates to drop off. For euro buyers this year, a trade sooner rather than later is sensible. If you do not have all of your sterling available a contract that may interest you is a forward contract, which allows you to fix exchange rates now and pay later.
For more information in regards to the currency market, forward contracts or how I can achieve you the best exchange rates, feel free to email me with your requirements, timescales, the best number to reach you on and I will give you a call to discuss your options firstname.lastname@example.org.
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