It is a quiet day in the currency markets today with the key data of note being a speech from the head of the Federal Reserve Bank of America Janet Yellen, any comments from Yellen about the US economy, interest rates or tapering Quantitative Easing will be closely watched and could cause some big movement on the USD. Considering GBP USD are close to the 1.70 level which represents excellent opportunities to buy Dollars. However, tomorrow we have the key interest rate decisions for both the UK and the Eurozone which, along with any accompanying statements could provide big market movement for Sterling Euro exchange rates. While it is not expected that interest rates will be changed in the UK or the UK’s Quantitative Easing programme will be reduced but in Europe there is an outside chance the European Central Bank (ECB) will act in order to try and prevent deflation in the single currency economy. Recently the head of the ECB, Mario Draghi has stated that they are closely monitoring the situation and some analysts have suggested they may need to introduce bond buying schemes to pump more money into the system or alternatively there is a very outside chance that the ECB will introduce negative interest rates.
So, if any comments or actions from the ECB tomorrow could be absolutely key for GBP EUR exchange rates and so if you need to buy or sell Euros make sure you stay in close contact with your currency broker who will be able to give you all the latest news from both the Bank of England and the ECB.