The Euro is likely to see a volatile day on Thursday after the European central Bank (ECB) meeting at 12:45. Whilst interest rates are widely expected to remain on hold there is likely to be reaction to any changes in the tapering that the central bank started in the Autumn. The press conference where ECB President Mario Draghi will be taking questions can throw up some surprises and there have been a number of over reactions this year which the ECB has had to address.
Whilst UK unemployment today remained at the ultra-low figure of 4.3%, the lowest since 1975, the EU has had a good run of economic data with economic growth and inflation finally starting to return to more normal looking levels. This bodes well for the Euro and there could be further gains to be seen for Euro rates.
Clients looking to buy or sell Euros should pay close attention to developments at the EU summit which starts tomorrow and concludes on Friday. Any agreements which are made that will allow Brexit negotiations to move on the second phase of the talks which covers trade are likely to be received well for the pound and there could be a material jump higher in the rates.
It cannot be stressed how important this EU summit is for so many reasons and GBP EUR is likely to see considerable volatility on the back of it. My view is that leaders on both sides are likely to be cautiously optimistic which should warrant a jump higher for GBP EUR and present some long awaited better buy opportunities for this pair. To discuss how these political and economic events are shaping the currency markets and how they impact on your transfer then please feel free to get in touch with me at email@example.com