Thursday afternoon the European Central bank will release their latest interest rate decision followed by a statement by the President Mario Draghi and a Q&A session. Interest rate decisions have the potential to have a major influence on exchange rates, as monetary policy and stimulus ultimately impacts the value of the currency.
Last week the euro strengthened when an ECB member stated that the quantitative easing program could be tapered further by the end of the year, if the growth numbers continue to improve. At present the ECB inject €30bn into the economy in a bid to stimulate growth and arguably with unemployment at record lows and growth numbers continue to improve now maybe the time to cut the program all together.
However the ECB have also shown concern in recent weeks that the devaluing US dollar is causing the euro to strengthen at a pace that is not ideal, making European exports far to expensive. If the ECB were to cut the Q.E program you would expect the euro to strengthen further and therefore make European exports even more expensive.
It appears that the Europeans are stuck between a rock and a hard place. Some economists are suggesting a cut in the Q.E program is needed and others are suggesting the Euro cant strengthen any further. My opinion is that the ECB still have time and the President will keep his cards close to his chest at this meeting. Nevertheless this event has the potential to impact euro exchange rates therefore so if you are exposed to euro transfers keeping a close eye on this release is key.
If you are buying or selling euros this week, month or year and I have not covered the currency pair you are trading, I would recommend emailing me with the currency pair (EURUSD, EURGBP, EURAUD) and the reason for the transfer (company goods, property purchase) and I will response with my forecast and the options available to you firstname.lastname@example.org. Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn.
** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you a few minutes and in the past I have saved clients thousands! **