As expected the Bank of England left things unchanged today with the only slight movement on sterling possibly due to lower than expected housing data released overnight. All market focus will now be on the ECB interest rate decision due out shortly and the press conference which follows.
There has been increasing speculation that the ECB will intervene at some point to avoid current low inflation levels turning into deflation. At recent press conferences Mario Draghi has highlighted that the longer inflation remained low, the harder it would be to tackle, and for the last few months it has definitely been subdued. In fact Germany has seen some negative figures recently which is a big concern. There have been hints from Draghi that they were prepared to take unusual measures if this situation continued whilst at the same time alluding to the fact that everything is ok. Whilst I don’t expect the ECB to do anything as soon as today, it is still a possibility. More likely in my view is that they will take a wait and see approach, hoping that inflation will right itself in the near future. However this is where the Press Conference will be key as markets will be hanging off every word to see what future policy may have in store, as such we could see a lot of volatility this afternoon.
If you are looking to buy or sell Euros then please be ready to act quickly just in case- if you would like help with a currency transfer and want to get the best deal on your foreign exchange then feel free to email me, Colm, at firstname.lastname@example.org and I would be happy to explain what services we can offer.