At 12:45pm BST today the latest European Central Bank’s interest rate decision will be released, which will then be followed at 13:30pm by a speech from the President of the Central Bank, Mario Draghi. There has been so much talk of interest rate hikes and changes to economic stimulus that today could go one of two ways.
If Mr Draghi is optimistic for the immediate future and suggests the bond buying program will be tapered back then that could result in the GBP/EUR exchange rate moving towards the 1.10 level. Alternatively, if Mr Draghi is negative then the GBP/EUR rate could possibly move towards a multi-month high of 1.15.
It is quite rare that you have two potential extremes hanging on every word, however like on so many occasions before, Mario Draghi’s press conference is likely to cause Euro strength.
UK Retail Sales data
This morning at 09:30am there is also the latest release of Retail Sales data for the month of June. this is expected to show a major jump from previous readings which could be good news for anyone selling Sterling.
UK data has started to show cracks since Brexit in the last few months, which in turn has started to raise concerns. If this data comes in as positive there could be a small uplift, however any negative reading could quite easily cause a Sterling crash.
Sterling has been taking a constant beating at the moment with the GBP/EUR exchange rate moving to lower ranges every week. Until there is a change to the status quo, the general trend in my opinion is likely to be downward movement on the Pound to Euro exchange rate.