One of the biggest drivers on the currency markets is policies from central banks. In the same way a higher or lower interest rate will attract investment to a bank account, so too will movement on a central bank’s interest rate increase the attractiveness of a currency. For example a savings account with higher interest rates and better returns will be more popular than one with a lower interest rate and return.
The same is true on the currency markets, if a central bank is expected to raise interest rates then that currency will rise in value. Investors will buy it up in the hope that it will be more valuable in the future. Today is the ECB (European Central Bank) interest rate decision where we will get further news on whether or not the ECB will be looking to raise interest rates in the future.
Any signs that they will be could see Euro strength. It is unlikely there will be any actual change in the policy but we could see lots of movement if there is any changes in tone in the press conference which is at 13.30. For more information on the trends and themes driving your rate please feel free to contact myself Jonathan Watson by emailing firstname.lastname@example.org.
I expect today could be a very busy day on the rates so would recommend making plans. We can see the rates sometimes move 1-2 cents on such news which is a very big driver on the rate. Overall positions are suggesting that the Euro could find itself stronger, I would not be surprised to see this happen.
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