Draghi looks to halt QE programme but inflation forecasts stops euro boost

9 March, 2018

Ashley Finill

Once again the currency market has been dictated by the numerous political ongoing’s throughout the week which has seen the rates trading sideways. With coalitions likely to take place in both Germany and Italy in the coming weeks and months it has made investors of the Euro refrain from supporting the currency. However with the continued prolonged and messy Brexit talks is still a major thorn in sterling’s side. Investors have been very cautious in investment for the Pound since the Sterling saga began and with no end in sight, it could be some time to come before we see any real improvement. Deutsche bank has expressed their opinion on what the forecast they predict which the lows of 2017 for GBPEUR could return. The Deutsche bank said “Uncertainty over Brexit could yet threaten investor confidence and sap foreign investor demand, adding downside to the weighing up exercise for the Pound.

The ECB moved a step closer to ending its quantitative easing programme yesterday, dropping a commitment to increase assets purchase if the eurozone outlook deteriorates. The Euro was given a lift as the announcement was made. Mario Draghi then gave a speech and answered questions from the press. He mentioned that inflation forecasts for the eurozone were revised lower than initially thought for 2019, which brought the market back to the same levels as before the announcement for QE. For those of you with an imminent Euro requirement and waiting for the rates to shoot up you may be in for some wait, with both the UK and eurozone both having politically and economically which are seemingly outweighing each other it may be prudent to get your requirement in place sooner rather than later.

Today there is important data to be released which is likely to have an effect on the rates. Starting in the UK 9.30am as market manufacturing, industrial production and trade balance figures are to be announced. Over to the US in the afternoon at 1.30pm as nonfarm payrolls are to be released along with average earnings and the unemployment rate. Canada also release their unemployment rate at 1.30pm. Stay in close contact with your broker today at currency index.