Tomorrow could be one of the most volatile days in a short while with regards to the GBP/EUR rate. The European Central bank will reveal their latest interest rate decision, which is unexpected to change. However President Mario Draghi will speak afterwards and provide insights to the current and future economic conditions. There has been multiple different and some conflicting views from the ECB with regards to future policy and depending on what Draghi says tomorrow is likely to dictate the market.
If Draghi suggests there will be a tapering of the current economic stimulus then the GBP/EUR may fall below 1.12 once more providing a great window of opportunity for Euro sellers. Alternatively if the President argues that there still needs to be a heavy program in place then the Euro may weaken helping the GBP/EUR rate back towards the 1.14 level.
In total honesty tomorrow is a little bit of a gamble which will certainly have winners and losers. Sterling has been taking a beating of late with so much uncertainty and after the inflation data showed a slowdown optimism for a interest rate hike in the UK seems to have died off. Bad news for the Euro cold present one of the only methods in the short term for the GBP/EUR rate to rise. With that in mind nay movement towards the 1.15 level should be treated a scarce and acted upon.
When the markets are this volatile there will always be spikes and drops, making timing a transfer vital to maximise your funds. If you have any questions with my forecast above or would like to simply discuss an upcoming requirement you have please send me an email to [email protected].
I would be happy to share my thoughts with you and I may be able to offer a viable solution to help you complete a trade. When looking to complete currency transfers small movements in rates can make the difference of hundreds if not thousands of pounds.