You've landed on our UK website.
Click here to visit our USA website.

If you are having difficulty locating the information you require, we're here to help. Just get in touch and we will do our best to assist you.

ECB decision sends euro soaring

currency-newsECB decision sends euro soaring
Thursday proved quite positive for the euro, with the common currency broadly strengthening in response to the latest European Central Bank (ECB) interest rate decision. However, while GBP/EUR fell, the pound was able to hold its own against some of the other majors. 

The GBP/EUR exchange rate is currently trading €1.0895, GBP/USD has advanced all the way to $1.3131, GBP/AUD has dipped slightly to AU$1.6229, GBP/NZD has shed 0.5% to trend in the region of NZ$1.7991, and GBP/CAD is holding around C$1.5898.

How are the major currencies likely to end the week? Keep reading to find out…

What’s been happening?

Yesterday’s European Central Bank (ECB) interest rate decision was the big market-moving news item. Although the ECB took no action at this juncture, the euro still surged following the announcement as growth forecasts were raised and President Mario Draghi implied that decisions on the tapering of quantitative easing would take place in October.

According to Lloyds; ‘The economic growth forecast for this year was revised up to 2.2% from 1.9%, which would be the strongest outcome since 2007, while 2018 and 2019 forecasts were left unchanged at 1.8% and 1.7%.

President Draghi said that discussions on future policy had been “very, very preliminary”, although relevant committees have been tasked to work on options. For now, discussions on various scenarios, including their pros and cons, focused on the trade-off between: (a) the length of the programme; and (b) the size of monthly flows.’

The GBP/EUR exchange rate tumbled back to €1.08 in the wake of the decision, but GBP/USD was able to advance beyond $1.3131.

What’s coming up?

While today’s UK manufacturing, construction and industrial production figures and trade balance report may have a modest impact on the pound, GBP movement may be muted ahead of next week’s inflation report.

If the UK’s Consumer Price Index shows an increase in inflation the pound could bounce higher on boosted Bank of England (BoE) interest rate hike expectations.

However, dipping inflation would reduce the odds of the central bank taking any action on borrowing costs for the foreseeable future, sending Sterling lower.

Other UK news to focus on includes the nation’s jobs numbers and Thursday’s potentially influential Bank of England (BoE) interest rate decision.

The currency market is also likely to respond to Australia’s employment stats, US inflation data, and US advance retail sales numbers.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

Check our exchange rate

Thanks, we'll be in touch.

Check your inbox - one of our currency experts will be in touch to complete your quote.

If you want see our online exchange rates straight away, simply register online & log in.