Having started the day just breaking into the 1.09’s the GBP/EUR has spent most of the afternoon slowly declining down to the low 1.08’s. There had been optimism at the end of last week that we may have moved back to the 1.10 level this week however that now looks a stretch too far.
Tomorrow the day starts with a whole raft of Purchasing Manager Indexes for the EU and individual nations. This data provides an indication into the business confidence and like previous months this is expected to be strong. Therefore tomorrow morning I think the GBP/EUR rate could be back into the 1.07’s like lat week.
Later in the week the European Central Bank will provide their latest interest rate decision, whilst there is nothing expected to change the statement and speech that follows could create volatility. There has been talks over the last few months as to when the ECB may reduce the current stimulus measures with many suggesting September is the time. However President Mario Draghi in a speech last week suggested that it would be December before anything changes. Investors has started to price in the September changes which means if the plan does change we could see Euro weakness. In short tomorrow could see the GBP/EUR drop but once we get to Thursday we could see Sterling make any lost ground back up, potentially returning back to the 1.09’s.
If you do have a question with regards to my forecast please get in touch. When you come to moving large sums of money a movement of a cent can often relate to a significant difference in your returns. Helping you formulate a strategy could make sure you’re in the best position to exchange currency when the market is in your favour, please contact me at [email protected]