Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. In the below table you will see the difference in Euros you would have achieved when buying £200,000.00 at the high and low points on Thursday of this week:

Currency Pair% ChangeDifference on £200,000
GBP/EUR0.5080%€1100

Will the Jackson Hole Symposium be the platform to discuss QE tapering?

Today Mario Draghi, the head of the European Central Bank (ECB) will be speaking at the Jackson Hole Symposium. The Jackson Hole symposium is a gathering of academics, central bankers and various policy experts where they discuss current monetary issues and potential solutions.

Strong possibility of an end to Eurozone Quantitative Easing (QE) program

Investors are waiting with bated breath to see if Draghi mentions tapering Quantitative Easing (QE). QE is an unconventional form of monetary policy where a Central Bank creates new money electronically to buy financial assets, like government bonds. This process aims to directly increase private sector spending in the economy and return inflation to target.

The ECB are currently pumping €60bn into the Eurozone per month, if there is a hint from Draghi that this is set to be reduced the Euro could strengthen significantly.

Draghi spoke on Wednesday in Lindau, Germany and has defended QE, lessening the chances he will bring up tapering QE at Jackson Hole. Draghi stated “Central banks are not powerless at the effective lower bound. Provided they are willing to explore non-standard policy avenues, they can continue pursuing their price stability mandates even in the most adverse circumstances.”

ECB sources have indicated Draghi would not be using his speech to discuss QE, but investor hopes of a surprise remains regardless. I am doubtful he will announce tapering, the strength of the Euro is on the verge of damaging Eurozone, I am of the opinion it would be wise for Draghi to attempt to jawbone, talk down the value of the Euro to try and quell this issue.

CPI & Unemployment data could be of Consequence next week

Consumer Price Index (CPI) data is a key measure of inflation and can influence markets. CPI is released on Thursday and I expect a slight rise and this could strengthen the Euro. Unemployment is also released on Thursday and I think there could be a fall which could further bolster the Euro.

Thank you for reading my Euro currency report, if you have any questions about Euro exchange rates I would be more than happy to discuss them – you can contact me with any queries here.

 

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.