The latest Consumer Price Index data will be released this morning for the Eurozone and is expected to show no growth from August to September. Last month economists at the European Central Bank (ECB) gave a warning that Eurozone inflation could be set to start to fall as we move in towards 2018.

The main topic for the European Central Bank at the moment is the tapering of the Quantitative Easing policy. The ECB have been pumping money into the Eurozone economy and now that there seems to be some improvement in the economy they may start to relax the policy. The President of the European Central Bank, Mario Draghi will deliver a speech tomorrow which should address the current situation and could well cause major market volatility.

If Mr Draghi does suggest that there will be a change to the policy then I would not be surprised to see the GBP/EUR initially fall back. Considering that the President of the European Central Bank is notorious for causing positive Euro movement some might argue no matter what he says it will be received well.

Previously the central bank were worried that the Euro would continue to strengthen if they changed economic policy. However, now that the Euro has dropped off the high there could be more confidence in changing the current measures. In short, today could see a strengthening for the Euro, but to add to the drama there will also be UK Inflation data released.

The UK are expecting a movement into the 3% level which is the top of the Bank of England’s target bracket. Essentially at 9:30am we could see a movement in favour of Sterling as the chances of an interest rate hike could increase. This could then be followed at 10.30 by a positive Eurozone release which would help the GBP/EUR rate drop.