Pound falls vs Euro on ECB comments
ECB President Jean-Claude Trichet said euro zone rates could rise next month in a press conference yesterday. This stunned the markets which were expecting a rise much later this year. The ECB also pledged "strong vigilance" on rising inflation, a phrase that in the past has signalled a forthcoming rate rise.
The news caused strength in the Euro, making it more expensive to purchase and pushed rates down significantly throughout the day.
In contrast, expectations for an early UK rate rise in contrast were scaled back after a below-forecast purchasing managers' survey on the key UK services sector.
So it now seems the EU will raise interest rates before the UK. This means it's likely GBP/EUR rates will struggle to rise, and so if you need to buy Euro you may wish to consider the different contract options we have to help protect against adverse movements. Contact us today to discuss this.
Today's' DataWe end the week with US unemployment and Non-Farm payrolls. This often causes significant volatility for Sterling vs. US Dollar rates as the actual figures are often very different to those forecasted.
Labels: ECB, Interest Rates