Thursday 9th January 2014
Good afternoon. A quick update on exchange rates, as we have seen Pound/Euro surge to new highs, and currently the rate is €1.2150.
The reason for the gains were as I outlined in my post yesterday. As I predicted, there were no surprises from the central bank decisions, however in the ECB Press conference, I mentioned that if the President Mario Draghi hinted at lower interest rates in the future for the EU, it would weaken the Euro and push rates up.
This is exactly what has happened. He said rates would "remain at present or lower levels for an extended period of time". The markets reacted immediately, and as you can see from the chart below, the GBP/EUR rate shot up from 1.2085 to 1.2150.
This is now a very attractive time to need to fix a rate buying Euros. You can read more about what happened in the ECB press conference here on the BBC website.
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