What will the ECB do?

The first week of June is a key week for anyone purchasing or selling the Euro; Inflation is very low in Europe and it seems the ECB are running out of options in regards to how to stop this from carrying on.

Mario Draghi last month indicated that he may be looking into Quantitative Easing for June, (Printing more money), this was priced into the market straight away, which is why we saw the GBPEUR exchange rate surge immediately. However over the last few days there has been uncertainty surrounding whether the ECB will do further QE or cut their interest rates.

On Thursday we have the ECB rate decision, on this day we will find out which way they will go, if any; the market has priced in either more QE or a interest rate cut, and either one of these will weaken the Euro majorly- However, it must be noted that if the ECB's rate remains unchanged and they don't do any QE, then we will see Euro strength on the back of this.

We do have a lot of high and medium priority data coming out before Thursday, which will increase the volatility in the market, however Thursday really is the key day- so if you are currently looking at making a transaction and would like further analysis, or would like to look into stop losses and limit orders, then please don't hesitate to contact me directly at prem.raja@currencies4you.com