Exchange Rate News In the Lead Up To Interest Rate Decisions
With the key interest rate decisions from both the European Central Bank (ECB) and the Bank of England (BoE) tomorrow the exchange rates are likely to remain volatile in anticipation of any surprise announcements. Recently Sterling has fallen from a 2 year high but over the last couple of days we have seen the Pound claw back some ground against the EUR which is again presenting those clients looking to buy Euros with some excellent opportunities. It is expected that there will not be any change from the Bank of England tomorrow however the ECB’s decision and possibly more importantly the accompanying statement could throw up some interesting movement for the Euro, especially if Mario Draghi and the rest of the Central Bank act again in order to prevent deflation. However, with much of Europe shut down for the month of August it is rare that the ECB make any policy changes during the month so it may be more of a case of talk but no action tomorrow although this could still cause a lot of GBP EUR movement.
Before the announcements tomorrow we have some manufacturing production figures for the UK and possibly most notably is the latest Gross Domestic Product (GDP) estimate from the National Institute for Economic and Social Research (NIESR). The NIESR provide a rolling 3 month estimate of the UK’s GDP and is an excellent forecast of how the official stats from the Office of National Statistics will come out later in the month and so a strong announcement could lead to Sterling strength and with GDP having shown a positive trend recently it is hoped that this will continue.
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