Draghi Takes Centre Stage

It could be a volatile day for the Pound as investors continue to react to Brexit speculation whilst also pricing in the outcome of Draghi’s comments.

Previous Day's Market Highlights

Concerns of a  slowdown in eurozone growth increased yesterday morning after the Purchasing Managers Index registered its lowest level in more than two years. The sharp decline reflected the impact that uncertainty over global trade relations is having on the EU economy. The composite figure fell from 54.1 to 52.7 with Germany registering the largest decline to 52.3 from 53.7. GBP/EUR edged 0.3% higher to 1.1334. With this data together with the ongoing political issues in Italy, EUR/USD fell below 1.14 for the first time since August 20th.

However, the focus quickly shifted back to Brexit and in particular the Irish border issue. The pound found itself once again on the back foot falling to a seven week low (1.2880) against the dollar as Theresa May prepared to meet conservative MP’s amid fears of a no confidence vote.

As expected, The Bank of Canada on Wednesday raised interest rates by 25 basis points, to 1.75%. However the market reacted to the subsequent statement hinting that the pace of future rate hikes may increase given the economy was running at almost full capacity and did not need any stimulus. The Canadian dollar jumped 1%, with GBP/CAD falling to 1.6716.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1318 1.1463 1.1112 2.19%
GBP/USD 1.2903 1.3257 1.2880 2.84%
EUR/USD 1.1400 1.1620 1.1377 2.09%
GBP/AUD 1.8267 1.8735 1.8011 3.86%
GBP/NZD 1.9800 2.0481 1.9641 4.10%
GBP/CAD 1.6810 1.7286 1.6598 3.98%

Today's Market Highlights

Today, the focus lies with ECB  interest rate decision and press conference at 1.30 and in particular Mario Draghi. Draghi has made his monetary policy stance clear at previous meetings, and therefore is not expected to consider a rate hike until late summer next year. The press conference is unlikely to surprise, however investors will be looking for any hawkish signals  on inflation which may give the euro a boost. It is expected that Draghi will be pushed on his view on the drama unfolding in Italy.

It could be a volatile day for the pound as investors continue to react to Brexit speculation whilst also pricing in the outcome of Draghi’s comments.

Today's Economic Calendar

Time Currency Release Consensus Previous
12.45pm EUR ECB Rate Decision 0% 0%
1.30pm EUR ECB Press Conference
1.30pm USD Core durable goods orders m/m 0.5% 0%