Sterling has made some welcome gains during the course of this week after the Eurozone published some lower than expected economic data in the form of Services data. The expectation for August was marginally lower and this has caused the Pound to make gains versus the single currency.
Eurozone data this week
On Thursday we could see a huge amount of movement for Sterling Euro exchange rates as there is a lot of data due to be released. We begin the morning with German Industrial Production data followed by French Trade Balance figures. Then comes the GDP estimate for Quarter Two with expectations for 2.2% growth year on year, so anything different is likely to cause a lot of volatility.
Arguably the biggest movement could be saved when the European Central Bank (ECB) announce their latest interest rate decision. I don’t personally expect to see any change to interest rates but any mention of when the ECB could begin tapering their Quantitative Easing (QE) programme could cause movement for GBP/EUR exchange rates.
ECB president Mario Draghi is due to take centre stage, but I think this time round he will not necessarily begin tapering and the latest rumours are that this could happen towards the end of the year. So, the question is could any absence of this cause Sterling Euro rates to move in an upwards direction?
Anyone with a requirement to buy or sell Euros should keep a close eye on what happens on Thursday as exchange rates could be very different from where they are at this moment in time.
Overall I think any positive movements for the Pound could be relatively short term as the main driver of the currency markets is that of Brexit and I cannot see this being sorted out in the near future.