Those clients looking to buy Euros with pounds are seeing attractive levels for buying at present and pushing towards 1.15 for the GBP EUR pair. There are likely to be some bumps in the road over the ongoing Brexit negotiations and whether or not Britain will remain in a customs union. The House of Lords have been voting this week on a series of amendments which will make life difficult for the Prime Minister and her vision of Brexit. The Bank of England also meet today for the latest interest rate decision although the bank is highly unlikely to raise interest rates today.
There is likely to be considerable volatility around this meeting following a series of weak UK economic data including very poor GDP numbers which fell to just 0.1% for the first quarter. Any developments here today could see volatility for the GBP EUR pair and clients may wish to plan around the event. For me there are unlikely to be any material gains for the pound and there is some downside risk if there is a cautious note from Governor Mark Carney.
He is likely to state that there will be no interest rate hike but the bank remains ready and committed to hiking once the data picks up. This morning’s UK house price data as per the Royal Institute for Chartered Surveyors (RICS) also arrived weaker than expected adding more uncertainty to today’s decision.
European Central Bank President Mario Draghi will be speaking tomorrow and is likely to be picking up on recent inflation concerns for the bloc. The EU saw a healthy 2017 with inflation picking up and much better growth although this has stalled through 2018 causing uncertainty over future monetary policy from the central bank.
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