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Volatile Trading Day – GBP EUR Exchange Rate Forecast – ( Andrew Bromley )
Fresh 7 year highs were seen yesterday as the Pound pushed through the 1.38 level – yet another point of so called resistance giving in! It’s very clear to see now that with no improvement for the Euro following the temporary resolution in Greece, the Single Currency is deemed for continued losses.
Today is a very busy day for the currency pair, as from midday a series of important data sets are announced.
Firstly the UK release its Interest Rate decision, a key indicator to the UKs Economic performance. This is at midday and if there is any movement (although unlikely) you could see big strength for the Pound.
This is followed by the key event for the day – 12:45 – Mario Draghi (Chair of the Eurozone Central Bank) describes how the recently announced ECB Quantitative Easing will be split amongst the EU economies. The Quantitative Easing Program is a process of buying bonds in the head bank, but as the Eurozone is a collective of nations it will be a sign of weakness if say the majority of bond buying is in the major EU powerhouses (Germany etc).
The ECB Interest rate decision is released at a very similar time (12:45) and as with the UK Interest rate decision could have a profound impact on the currency. The overall ECB interest rate is 0.05%, so you’d think that there’s no room for manoeuvre. However, as seen recently with the Swiss National Bank it is feasible for interest rates to be negative! If that were to happen the Euro would absolutely plummet – perhaps even in to the 1.40s! If this level is seen, don’t be surprised to see Mark Carney of the Bank of England start to talk down the Pound, in an effort to keep the Pound at a fair value for UK exporters.
The week is closed off by Economic sentiment surveys for several EU Economies, so the next new trading sessions are key.
If you have an exchange requirement, making sure that you have your position in the market ready today is key. Therefore, please feel free to drop me a line direct to the trading floor to discuss your requirement on 01494 787 478 – Ask for Andrew Bromley as I am on the Euro desk. Alternatively, drop me an email to [email protected]
I look forward to hearing from you…
Source: http://www.eurorateforecast.com/2015/03/05/volatile-trading-day-gbp-eur-exchange-rate-forecast-andrew-bromley/
