Like the UK Counterpart the European Central Bank will deliver their latest interest rate decision tomorrow. There is expected to be little change, however one of the focal points will be what the Central Bank chooses to do with the quantitative easing program. More on this key information due out tomorrow in the below Euro report, with the table showing the range of GBPEUR exchnage rates for the past month with the difference in return you could have achieved when selling £200,000.00.
|Currency Pair||% Change||Difference on £200,000|
In October the amount of bonds being bought by the ECB is expected to fall to €15bn a month with the end of the year also bringing the end of the program entirely. Mario Draghi will no doubt be thoroughly questioned on these plans and any changes could have potential for market volatility. The other key guidance the bank is expected to provide is when the ECB plan to raise interest rates. Currently markets are pricing in a 90% chance of a hike happening in October next year, while a move by the end of next year is fully priced in.
With this in mind if Central Bank president Mario Draghi suggests these targets have moved or are unlikely to be met, the Euro could sustain instant losses. Draghi is well renowned for strengthening the Euro when he speaks and the chances are he will talk up the Euros prospects so don’t be surprised to see the GBP/EUR fall when he starts to speak at 1.30pm
The EU Summit taking place in Salzburg on the 20th September is expected to be the first time that the 27 EU countries will discuss Theresa May’s proposal for Brexit. The Summit is an informal event that was added to the calendar in order to push through progress in the Brexit negotiations.
From the comments from EU Chief Negotiator Michel Barnier over the past week, it appears some sort of deal could be struck in the next few months. In my opinion this should have a positive effect on the GBP/EUR rate and a climb towards 1.14 by the end of September could be on the cards.
If you’re looking to sell Euros then making sure you trade at some of the best levels in 10 years could involve acting sooner rather than later. Contact the trading floor to discuss your options today before the day’s events take place.
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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