Thursday 24th April 2014
Sterling remains well supported today, however rates haven’t risen any higher following the press conference by ECB member Mario Draghi.
Sterling/Euro remains at €1.2150
As highlighted in previous posts this week, there was a chance that Pound/Euro rates could have risen today.
The ECB president Mario Draghi has been warning against a strong Euro, and in recent speeches he has given little hints about further monetary easing to stop the Euro getting too strong. He gave a press conference this morning, during which he could well have talked about the Euro being overvalued if he had chosen to do so, and if he had hinted at some sort of easing I would have expected GBP/EUR to make gains.
In the event it had no real effect. He did say that the ECB could make asset purchases to ward off the threat of disinflation, and mentioned that undue tightening of monetary conditions could lead to negative deposit rates, but didn’t really add anything to what he has already said previously. Read all his comments here if you so wish!
So rates did climb a little from 1.2130 to 1.2150, where they remain at the time of writing. We saw a slight dip in rates before his speech but as the chart below shows, with nothing new on offer in his words, the market returned to its starting point.
We now look ahead to tomorrow morning’s UK Retail Sales. I’m expected the number to show growth of around 3.8%. As Retail Sales are a good overall barometer of economic activity, it could push Sterling higher if the actual number surprises to the upside.
Sterling/Euro close to a 14 month high
The current levels are within 1 cent of the best they have been since January 2013 so it does seem to be a favourable time to buy Euros with Sterling.
If you have an upcoming currency requirement, then why not get in touch to see what rate I can offer you, those with large volumes to convert may be surprised at the difference even a slightly better rate of exchange can make.