It was widely anticipated that the European Central Bank yesterday would taper the quantitative easing program and the President of the Central Bank delivered. The ECB will now be injecting €30bn into the European economy instead of €60bn in a bid to continue economic growth. However, Mr Draghi also announced that he would be extending the bond buying program until at least September 2018.
For people that are converting pounds into euros or euros into pounds, the feel on the market yesterday was that the euro would make inroads against the pound but as Mr Draghi extended the program the euro actually weakened against the pound.
The next key economic data release to look out for is the Bank of England’s interest rate decision next Thursday. It is widely anticipated that the Bank of England will raise interest rates to 0.5%. This would be the first time the Bank of England have raised interest rates in 10 years. At the moment I am sitting on the fence to whether Governor Mark Carney will go through with the hike as GDP has risen but wage growth continues to dwindle along.
Longer term it appears that Brexit negotiations are heating up and UK Prime Minister Theresa May believes the UK and EU are close to negotiating a deal in regards to EU citizens’ rights. If this is the case then the UK are closer to negotiating the important trade deal and therefore I expect the pound to start to recover against the euro and in fact all of the major currencies.
I have always been under the opinion that people buying the pound with a foreign currency have time, however there is something now in the back of mind that believes it’s only a matter of time until the pound makes inroads against all of the major currencies.
When buying or selling the Pound it’s important to analyse both currencies that you will be trading (GBPUSD, GBPEUR, GBPAUD). If you would like to save as much money as possible feel free to email me with the currency pair you are looking to trade and the time-scales you are working too and I will email you with my forecast and the process of using our company firstname.lastname@example.org.
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** If you are purchasing the pound with a foreign currency, rates are fantastic at present however could get better. Outline your requirements to me and I will keep you up to date with market movement and potential opportunities. **