Over the last few days it has been political uncertainty largely driving the Sterling/Euro pair. Today however focus shifts to comments from central bankers, and these comments have the potential to move Pound/Euro rates over the course of today.
Bank of England
First up we have Andy Haldane, the Bank of England's chief economist and member of the Monetary Policy Committee giving a speech at 2pm this afternoon. He was previously one of the BoE's more dovish members, helping to keep interest rates at a record low for many years.
In recent months however he has gone against the Governor Mark Carney in signalling that he thought the BoE should consider raising interest rates. If he drops further hints today that he thinks the time is approaching to tighten monetary policy, then it's likely it will give Sterling a boost and GBP/EUR could rise above the €1.12 mark. (A currency generally strengthens when there are rumours of an interest rate hike, due to the higher return on offer increasing demand.)
European Central Bank
A little later at 15:30pm we have speeches by members of the European Central Bank, including the president Mario Draghi. Again we are looking here for any hints and comments that the ECB will be looking to tighten monetary policy and start to taper their stimulus programme.
If we see this, then it's likely the Euro will strengthen which could bring GBP/EUR rates back down again.
As you can see, GBP/EUR today is likely to be pulling in different directions depending how the markets react to these comments from central bankers.
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Labels: Bank of England, Central banks, European Central Bank, Foreign Exchange Forecast, Interest Rates, Mario Draghi, Mark Carney, Pound/Euro