Last month President of the central bank Mario Draghi made it clear that further stimulus is on the horizon for the EU, in a bid to stimulate growth and inflation.
Alongside negative interest rates, many analysts are suggesting that the bond buying scheme known as quantitative easing (QE) could be on the horizon. With Mario Draghi set to leave his post at the end of October and head of the IMF Christine Legard set to take over, markets are trying to predict whether Mr Draghi will start the QE program before he leaves.
History tells us when a central bank starts a QE program the currency tends to come under scrutiny and is most likely to devalue against its counterparts. It’s been a tough year for the eurozone due to the global slowdown however I expect the euro could come under pressure once more throughout the last quarter of 2019.
The pound has fallen to multi year lows against the euro due to the monthly falls we have seen since the start of the UK summer. The ongoing Brexit saga I believe will be the main driver for the currency pair and all eyes will turn to MPs within the House of commons at the beginning of next month. Will Boris be overthrown by Tory rebels or is a no deal Brexit inevitable, these questions are an unknown, but these factors look likely to impact pound to euro exchange rates.
For more information on how Brexit could impact your currency exchange feel free to contact the trading floor.
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