Will the ECB add to their current QE programme?

Quantitative Easing is the hot topic in the Eurozone present, and Mario Draghi’s comments weakened the Euro at the beginning of the week to a 2 month low against the Pound, following hints that there may be an extension announced to their current QE program in December. The ECB’s next monetary policy meeting is on December 8th, so any clients with a Euro requirement should keep in touch with their broker here in the lead up to this so that we can keep you informed of all the latest market movements.

Based on Monday’s Euro decline, it is highly likely that we could see further falls next month if there is an extension to the current program, so there may be some excellent opportunities for Euro buyers to take advantage of.

If you are buying Euros in the near time and need to move shortly however, moving sooner rather than later may be the best course of action as the Euro has gained against the Pound as a result of Philip Hammond’s first Autumn statement this afternoon. This has the potential to create uncertainty surrounding the value of the Pound and we could therefore see this week’s gains for the Pound quickly reversed. There are also Services figures released from the Eurozone this morning which are set to show an improvement for November compared to October, and this could strengthen the Euro in the short term.

Looking towards the end of the year and early next however, although I believe the Euro could benefit from a weaker Pound today, I believe that there are a number of factors on the horizon that could be cause for concern for any clients selling Euros to buy Pounds which I have outlined briefly below.

Italian Referendum on constitutional reform

The Italian government will be holding a referendum on constitutional reform on the 4th December in an attempt to speed up the decision making progress and give more powers to their equivalent of the House of Commons. However, the current PM, Matteo Renzi has claimed he will resign if the referendum fails, and this could pave the way for the Eurosceptic ‘Five Star Movement’ to gain power. They have promised an EU referendum if they do and if that’s the case it could throw the Euro in to free-fall.

General Election in France

I speak daily with individuals and business in France and whenever the topic moves towards the French election next year, Marine Le Pen’s name always comes to the fore. Many believe that she could come in to power next year and if she does win the election in France she may be viewed as the riskier option by investors and we could see the Euro tumble as a result.

Our traders here have an average of 8 years’ experience in the industry and although they cannot advise you when to trade, they can draw on their experiences to help you make an informed decision of when to buy your currency. Contact us today to help us act as your eyes and ears in this volatile market.

If you found my market report useful this morning feel free to leave comments here. I will be available today in the event you have a currency transfer requirement and would like to understand how political events in Europe may impact this.

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