Sterling has pushed back through the 1.15 level against the euro following comments made my European Central Bank (ECB) head Mario Draghi.
During his speech Draghi reiterated that interest rates will remain unchanged well until after their bond buying programme ends. It was his less than hawkish tone which appears to have devalued the Euro.
Speaking on Thursday following the ECB’s latest interest rate meeting the ECB promised to maintain its asset purchase programme at least until the end of September, Mr Draghi said there had been “a loss of momentum that is pretty broad based across countries and all sectors”.
He went on adding that his overall assessment was one of “caution tempered by an unchanged confidence” of moving towards the ECB’s inflation target of just below 2 per cent.
Following his comments the Euro weakened against both the pound and US dollar to fall to a low of below 1.1520/0.8680 and 1.2125. With the current market volatility could this be a n opportunity for euro buyers?
Should you be exchanging sterling to euros and with recent market sentiment suggesting the Bank of England may hold interest rates in May, I think this current spike could be a short term trend. With inflation and wage growth falling an interest rate hike could easily be delayed until later this year keeping the pounds movements in check. Should you wish to take advantage of this current spike please get in touch here