At the last ECB meeting Mario Draghi saved any new news until the press conference. At which time the market dropped from 1.2165 to 1,21 before soaring over 1.22… Such movements are not too common on the currency markets and can present some rare opportunities for savvy buyers and sellers.
The expectation is currently the ECB will cut their base interest rate and also look at some form of liquidity measure for the bank. LTRO (Long Term Refinancing Operation) is a mechanism that essentially lends money to banks at a favourable rate and term to allow them maneuverability in conducting their activities. It is not quite Quantitative Easing but is not a million miles away.
Usually you would expect this to trigger significant weakness but as the event has already been priced into the value of the currency this is unlikely. Assuming the ECB actually goes ahead with these measures we should expect little movement on the rates. What would be more interesting is if they talk of future activity in the Press Conference which could serve to weaken the Euro. If they don’t follow through with any action the Euro may strengthen but it could also weaken as investors lose confidence in Mario Draghi and his approach to this siutation.
If you need to make a foreign exchange payment I have many years experience managing client exposure to the currency markets and can offer assistance with timings and the best way to move money internationally.
Please email email@example.com