With mixed opinion on which way the ECB will take its current QE programme next year, next week’s GDP and Consumer price figures could pave the way for an extension next year. The economy has shown signs of life in October following stronger PMI figures, coupled with strong German output which is helping boost the economy at a time of political uncertainty.
However, inflation remains a concern for the Eurozone at 0.4%, and has been stuck at 0.4% for over 2 years. Mario Draghi of the ECB has limited options in regards to monetary policy, as current interest rates sit at 0%. Draghi’s only option is to extend the current QE programme beyond its March expiry.
If consumer price remains at .4% next week, investors may be gearing up for an extension to the QE programme which could create weakness for the Euro.
GBPEUR continues downward on UK politics
Despite positive GDP figures for the UK this morning. GBP/EUR exchange rates continue downward as political uncertainty continues. With little economic data for the UK for the remainder of the week, Sterling to Euro exchange rates may continue downwards.
Those looking to buy foreign currency with Sterling should consider doing so sooner rather than later. With Theresa May set to invoke Article 50 by March 2017, exchange rates could be far less favorable than they are present.