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Euro Pound Exchange Rate Crashes after ECB Extends QE Boundary

  • EUR GBP drops to 0.84 – GBP EUR exchange rate hits 1.18
  • Euro interest fades after ECB dodges tapering question – No end in sight for current QE program
  • Pound Sterling in high demand as Supreme Court hearing ends – Wait begins for 2017 verdict

The Euro has plummeted against Sterling during trading today and most other peers, in the wake of the afternoon’s European Central Bank (ECB) interest rate decision and press conference.

Interest rates remained on hold as expected, but the press conference brought news from ECB President Mario Draghi that quantitative easing would not be tapered off in the foreseeable future.

While a lesser amount of bonds are being purchased over a longer period, this has still disappointed investors due to it not indicating an end to the controversial method of monetary stimulus.

(Last updated December 8th, 2016)

The Pound has risen overall during trading today, due to apparent investor optimism on the back of a recent Commons vote.

Euro Pound Exchange Rate News: Mixed Fortunes for EUR as 2016’s Final ECB Event Approaches

The Euro Pound exchange rate has traded in the area of 0.85 so far today, but is at risk of falling to 0.84.

The latest domestic data out of the Eurozone has seen the Dutch inflation rate in November rise on the year from 0.4% to 0.6%, while Finland has recorded a sizable trade deficit expansion in October.

Euro investors remain on edge at present, given that potentially damaging announcements are due from the European Central Bank (ECB) in the near-future.

The aftermath of Italy’s referendum result lies over proceedings, with the news that Prime Minister Matteo Renzi has now resigned throwing a cloud over any real chances of Euro gains.

Pound Euro Exchange Rate Tight after Provisional Approval of Article 50 Trigger

The Pound has remained at a rate of 1.17 against the Euro today, owing to widespread investor uncertainty on yesterday night’s Parliamentary proceedings.

The key point of focus has been Wednesday night’s House of Commons vote on Article 50, which saw a majority of MPs give their provisional approval on triggering the Article in 2017.

Confusingly, however, this has not been an agreement that the terms will not be debated, nor has the vote been legally binding, which leaves the door open for potential rebellions among MPs if the negotiated Brexit terms do not seem agreeable.

Future EUR GBP Forecast: ECB Dovishness after Italy Vote could see Further Decline for Euro Pound

The Euro Pound exchange rate is expected to see worsening demand during the early afternoon, given the high-impact nature of the impending European Central Bank (ECB) events.

First off, the ECB will make its last interest rate decision of the year; this is currently expected to result in another rate freeze at 0%.

Of greater importance will be the following press conference, in which ECB President Mario Draghi is expected to give some reaction to the recent ‘No’ vote in the Italian Referendum.

The best case scenario for the Euro will be a cautious statement from Draghi that does not imply any significant policy adjustments. In the worst instance, the ECB President may well toy with the idea of further policy easing to compensate for any significant market uncertainty.

Current Interbank Exchange Rates

The Euro Pound (EUR GBP) exchange rate was trending in the region of 0.85 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.17 today.