Financial News from the Foremost Currency Group, 18th June 2018
In this week's Report:
Mixed ECB Meeting Prompts Pound Euro Exchange Rate Surge
Last week’s high: €1.1467
Last week’s low: €1.1326
Euro Slumps as ECB Rules out an Interest Rate Hike for the Next Year
The European Central Bank (ECB) failed to boost the Euro when it announced its intention to end its quantitative easing programme in December.
Although this represents a shift towards tighter monetary policy for the central bank, markets failed to react positively to the news.
Instead, investors focused on the indication that the ECB is planning to leave interest rates on hold for at least another year.
This represented a disappointment, especially as the ECB also lowered its growth forecasts for the Eurozone.
As a result, the GBP/EUR exchange rate climbed sharply higher on Thursday.
However, after its sharp decline the Euro was able to find some support ahead of the weekend, in spite of a narrower-than-expected Eurozone trade surplus.
With Greece on track to exit its final bailout programme and political jitters in Italy diminished for now, the downside potential of the single currency was still somewhat limited.
Euro Outlook: Stronger Eurozone PMIs Could Boost Confidence in Economic Outlook
The GBP/EUR exchange rate looks set to come under further pressure ahead of Thursday’s Bank of England (BoE) policy announcement.
Investors are keen to get fresh insight into the outlook of BoE policymakers, particularly with regards to the odds of an August interest rate hike.
Any indication that the BoE remains on track to raise interest rates in August, in spite of recent weaker data, is likely to drive the Pound higher against its rivals.
Fresh support could be in store for the Euro, though, if Friday’s raft of Eurozone manufacturing and services PMIs proves encouraging.
Signs that the currency union’s economy recovered some of its lost momentum in the second quarter should offer EUR exchange rates a solid boost.
09:00 European Central Bank President Mario Draghi Speech
12:00 Bank of England Rate Decision
15:00 Eurozone Consumer Confidence
09:00 Eurozone Manufacturing PMI
09:00 Eurozone Services PMI
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