UK GDP figures which came out this morning have come out much better than expected with growth for the third quarter coming out at 0.4% compared with the previous quarter of 0.3%.
This came out as a big surprise to many and this has caused the Pound to rise touching 1.12 on the Interbank level vs the Euro.
Both UK Manufacturing as well as the Services industry came out a lot stronger during this period. This means that there is an even stronger possibility of the Bank of England raising interest rates at their central bank meeting due out on a week tomorrow.
Bank of England governor Mark Carney has previously spoken out about monetary policy and suggested that any interest rate hike will be ‘limited and gradual’.
However, owing to the figures published this morning then an interest rate hike is becoming more and more likely which has given the Pound a lot of support this morning against the single currency.
Tomorrow the European Central Bank meeting takes place and the likelihood is that the ECB will announce some form of tapering of their current QE programme. The current level is €60bn per month and the chances are that they will reduce the amount when the current plan ends in December.
Therefore, this is a positive sign for the Eurozone and shows real strength and I think this could possibly see further Euro strength vs the Pound.
Even more important will be the subsequent press conference due to be held tomorrow afternoon at 130pm.
If Mario Draghi takes a hawkish tone then I think we could see today’s gains on GBPEUR exchange rates eroded.
Having worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers I am confident not only of being able to offer you bank beating exchange rates when buying currency but also to help you understand what is affecting the rates and therefore help you with the timing.
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