With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. The table below shows the difference in Euros you would have achieved when purchasing £200,000.00 during the high and low points on Tuesday.
|Currency Pair||% Change||Difference on £200,000|
Some may consider the threat of Catalan independence to be exaggerated as Catalonia accounts for around 20% of Spanish GDP. Which is meagre if we look at the Eurozone as a whole. However this is not the concern, the concern is if Catalonia does separate from the Eurozone and embrace a new currency, this could create a domino effect where others follow suit. The head of Catalonia, Charles Puigdemont has declared Catalonian independence, but quickly put this on hold ahead of talks with the Spanish government, which currently puts the situation in limbo. The referendum which was conducted recently was deemed as unlawful and was not recognised by the Spanish government although the results did show a large percentage of voters were in favour of independence.
If the call for an official referendum becomes a reality expect the Euro to suffer.
Throughout Today we will see speeches from European Central Bank (ECB) members Mario Draghi, Peter Praet and Benoit Coeure.
Mario Draghi will begin the speeches and as President of the ECB is speech should carry the most clout.
Investors will be waiting with baited breath to see if there is any indication that tapering will take place on the ECB’s current Quantitative Easing (QE) program. QE is an unconventional form of monetary policy where a Central Bank creates new money electronically to buy financial assets, like government bonds. This process aims to directly increase private sector spending in the economy and return inflation to target.
If the ECB do decide to bring down monthly increments form €60bn a month expect the Euro to strengthen substantially. There is the possibility the ECB members will address the tapering situation and there is more justification following positive inflation data yesterday.
Thank you for reading my Euro currency report, if you have any questions about Euro exchange rates I would be more than happy to discuss them – you can contact me with any queries on 01494 725 353 or email me here.
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