Mario Draghi is due to speak after the ECB's interest rate decision today, there is no rate hike expected, though investors will be listening to Draghi's comments on the EU economy looking forward. The table below shows the difference in Euros you could have achieved when buying £200,000.00 during the high and low points of the past week.
|Currency Pair||% Change||Difference on £200,000|
At 12.45 today the European Central Bank will reveal their latest Interest Rate Decision, which is expected to show no change to the 0% level currently. Despite there being no changes that doesn’t mean to say there won’t be major volatility as Central Bank President Mario Draghi will deliver his latest thoughts on the economy.
Analysts are expecting that Draghi will be fairly dovish on the prospects of a interest rate hike, however there could be a reduction in the quantitative easing program that has seen billions pumped into the economy. The Euro is expected to gain should that be the case, which is what we have seen over the last few days against Sterling with the rate falling into the 1.11’s. Tomorrow could be a day for further Euro strength if all goes as expected, although if the ECB have chosen not to wind down the currency stimulus then the markers will start to begin to wonder when that might happen.
President of the European Council Donald Tusk today outlined the EU’s position ahead of talks surrounding what the UK trade deal could look like. Whilst he reiterated the point that the UK could not pick and choose the best parts, he did suggest that some form of trade deal would happen which could rule out a “No deal” scenario.
The main significance of Tusk’s talk in my opinion is the drive of no free trade on services. He’s quite clear that the UK can have certain goods on free trade, however when it comes to services including the UK’s main financial services free trade wont be possible. Many would argue that this is a choice to deliberately damage the UK’s economy and no doubt this is what Theresa May will be fighting to defend.
The Eurozone is currently under pressure from two sides on trade with Trump threatening tariffs on the EU. Whilst the single currency is still strong it may eventually start to give up ground as the pressure continues. The EU is on course for its strongest growth in 8 years in 2018, however there could soon be cause for concern as economic conditions begin to change.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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