The Euro gains in anticipation of the interest rate decision tomorrow. (Ben Amrany)

The single currency (EUR) has had a day of slight gains against the pound and the US Dollar today as negative data from the UK & US has weighed on the pound and the USD.

Tomorrow should be a very interesting day for the Euro with a much anticipated interest rate decision to be announced at lunch time from Europe.

The European Central Bank is expected to leave monetary policy unchanged tomorrow, but President of the European Central Bank Mario Draghi will likely reiterate to markets that policy makers remain ready to undertake more monetary easing if necessary.

A couple of months ago the ECB cut the base rate of interest and announced unprecedented monetary stimulus which we have not seen out of the Euro block. This was due to a heavy fall in the rate of their inflation and the hope is to get people spending to raise the rate of inflation. All this contributed to the Euro falling to the lowest level against the pound for around two years and recently an 8 month low against the USD.

Eurozone inflation fell in July to 0.4% YoY, the lowest level since October 2009, and is well below the ECB’s target rate of 2%. The ECB have suggested in the past that a rate below 1% poses a risk of deflation.

Even though this has occurred we believe that ECB policy-makers are expected to stay on hold as they continue to monitor the impact of monetary accommodation measures announced in June.

The range bound recently has been as high against GBP as 1.2699 and a low of 1.2520 which is a fair spread in the space of a week or so. This is fairly volatile and I would expect there to be more chance of the Euro to continue to weaken than gain in the medium to long term. This should be a concern if you are selling Euros and I would be exchanging your funds sooner rather than later to minimsie any future losses. If you do not have full funds available then you can sell your Euros on a forward contract. 

If you are looking at making an exchange then I would recommend speaking with myself Ben Amrany and I can explain all the options available to you in trying to time your exchange and help you achieve a better rate of exchange than the banks.

If you would like to benefit from our award winning rates then email myself at [email protected] and I will contact you to explain the mechanics of buying your currency through us and the options available to you.

Thank you for reading.

Ben Amrany

[email protected]