020 7898 0500The euro initially gained sharply across the board as Mr Draghi started talking. It then weakened against the USD and GBP following his announcement that the deposit interest rate would stay at -0.4% and quantitative easing (QE) reduced to €6 0billion per month but would continue now until the end of 2017; expectation had been for the ECB’s programme of QE to end in September. We also saw a relaxation in what the ECB could buy when filling its €60 billion quota.
Mr Draghi seems determined to maintain stability in the aftermath of the Italian referendum and as we approach yet more potentially problematic elections in 2017. The markets, however, were clearly unimpressed.
Data releases today are mainly small scale stuff from Germany including import and export data. More important for the GBP/EUR exchange rate is UK inflation expectations which is anticipated to be 2%.
