020 7898 0500The euro shed half a cent to US$1.122 at one point yesterday, following reports that the ECB is preparing to cut its inflation forecasts. Lower inflation forecasts reduce the chances of the central bank tightening its monetary policy anytime soon. This will no doubt be confirmed later today when the ECB meets.
Meanwhile, Banco Santander bought Banco Popular for €1 in a move to rescue its fellow Spanish lender from collapsing. The ECB triggered the move after concluding that Banco Popular was running out of cash.
While this would have previously sparked mayhem in the financial markets, it was a pretty sedate affair.
It’s been a relatively quiet week for economic data but today and tomorrow could be huge in terms of announcements, events and currency movements. Ensure your exposure to the currency markets is sufficiently covered by your risk management strategy.
