GBP/EUR drops to €1.1750 ahead of ECB meeting today

Pound/Euro rates have slipped back away this week, and currently sits between €1.17 and €1.18, the range within which it was stuck for the latter part of November:

Sterling has weakened after Parliament voted last night to stick to the governments timetable of triggering Article 50 my March 2017. There had been hope in the financial markets that ‘Brexit’ would be delayed. Personally I think that this news is welcome and removes much uncertainty about when negotiations would start.

Another reason for the fall in rates is renewed Euro strength, making the single currency more expensive to buy. The Italian and Austrian political events are now out of the way, and the next political events in Europe aren’t until March next year.

All in all the current levels aren’t too bad considering GBP/EUR was at €1.10 last month. The Pound has seen a huge rally in the last 4 weeks but that rally now seems to be running out of steam.

European Central Bank could move GBP/EUR rates today

Today, the European Central Bank (ECB) meet to discussed extending their QE stimulus programme beyond March next year. On it’s own, this would weaken the Euro pushing rates higher, however I think while they will extend the programme, they will also reduce the amount of QE which the markets may take as positive.

All in all, I think what the ECB president Mario Draghi says in his press conference after lunch will be the main driver of rates. The EU economy is stagnant and showing barely any growth at all, and if he touches on this fact then the Euro may weaken pushing rates higher. Of course he may well say that all is fine and the EU project is fine in which case the Euro may strengthen, but I think the markets are aware of the reality that there is much uncertainty to come next year for Europe, so I think this will keep the single currency subdued, along with Sterling due to Brexit.

Are you buying or selling property abroad, or a business that needs to make international payments?

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