Draghis first major update since Brexit will take place on Thursday and the markets will be watching closely for any signs of financial intervention.
In a quiet week for Eurozone economic data buying and selling Euro rates will largely be decided by events elsewhere in their currency pairings until Thursday, with the European Central Bank’s monetary policy statement and interest rate decision. With an interest rate down to 0%, this event does not have the same hold over the value of the Euro as it once did. This is because Mario Draghi, the head of the European Central Bank, does not have as many options as most of his counterparts in how much he can intervene in financial policy, and therefore change the Euros value.
But his Monetary Policy Statement could be an interesting one. We saw the value of the Pound shift strongly last Thursday afternoon when the Governor of the Bank of England outlined how the Bank may proceed to protect the UK in the wake of the Brexit decision, and markets will be listening avidly to hear if Draghi has the same appetite for intervention if need be.
Whilst his options are limited, he has shown in the past that he will resort to emergency financial measures if necessary. This will be his first significant address since Brexit, and the revelation of the severity of the situation faced by the debt crisis with Italian banks, so we may be in for quite a stir.
With the recent stabilisation of the Pound, and the likelihood that Thursday’s events may look poorly on the value of the Euro, anyone holding Euros currently and are considering moving into Sterling may be wise to move sooner rather than later whilst rates are still moored down at these attractive levels.
If you have a requirement for Euros, Thursdays event could be quite a stir and may work in your favour. Call us today on 01494 725 353 to discuss your options.
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