Good morning, Mid prices GBPEUR 1.3085 GBPUSD 1.5145 For dealing prices please contact Infinity International at [email protected] or +34 966 260 777. Pound Gains Most in Two Years Versus Euro as ECB Weighs Stimulus - EUR/USD attempts a recovery to 1.1580 - ECB is under pressure to ease again The pound posted its biggest weekly advance in almost two years against the euro as speculation the European Central Bank will start government-bond purchases stoked demand for the U.K. currency as a haven. Sterling climbed to the strongest level since February 2008 versus the 19-member common currency after the Swiss National Bank unexpectedly removed its cap on the franc against the euro. ECB policy makers are set to meet in Frankfurt on Jan. 22. U.K. government bonds rose for a third week, pushing the 30-year gilt yield to a record low, after the slowest inflation in almost 15 years caused traders to abandon bets that the Bank of England will raise interest rates. The pound advanced 2.5 percent to 76.17 pence per euro at 5 p.m. London time yesterday, after touching 75.96 pence. Sterling declined 0.1 percent to $1.5143. ECB officials will weigh new stimulus, including quantitative easing, a policy that tends to devalue the local currency and may add to pressure on the franc against the euro. QE would also add to the pound’s strength, pushing it to 70 pence per euro by year-end, Beecroft estimates. The shared currency is now looking to leave behind the mid-1.1500s, pushing EUR/USD to the vicinity of 1.1580. The demand for the EUR looks to recover at the beginning of the week, with market participants focused on Thursday’s ECB meeting, when according to market chatter the central bank would announce a QE programme. Opinions remain divided regarding the size of the stimulus package, although consensus expect it would be between 500 billion Euros and 1 trillion Euros. In the data front, EMU’s Current Account and Construction Output are due today ahead of tomorrow’s more relevant ZEW Survey. With no important data releases from the euro area today, market focus will turn to this week’s major event – the ECB meeting on Thursday. The ECB is under pressure to ease again, as the euro area is in deflation and the current easing measures are insufficient to expand the balance sheet sufficiently. infinityinternational.co.uk
Posted on: Mon, 19 Jan 2015 08:32:51 +0000
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