Euro rallies on the back of Draghis speech

A busy day on the markets yesterday saw the Euro rally on the back of Mario Draghi’s speech. The day began on a positive for the pound with UK retail sales figures coming in at 0.6%; consumer spending increased in the month of June. However, it did very little to move the markets in Sterlings favour in anticipation of Draghi’s speech.

Draghi’s speech watched with interest by everyone in the markets with anticipation that there would be an interest rate hike or tightening of the QE program. Draghi however, pointed out there was no need for an interest rate hike just yet or ending the QE program, where the bank still is still buying £53b of bonds a month.

Draghi is putting “a robust recovery” as the reason for not wanting to raise interest rates as it could slow down the progress of the countries that use the Euro. There were suggestions that there could be easing in the QE program and a possible hike in interest rates in the Autumn should the recovery continue the same way.

The markets, which are super sensitive in the current climate, jumped to euro’s favour ending the day on a 14 month high against the dollar and gaining a cent on the pound. The present downward slope the pound is on and no definite upturn predicted in the immediate future; you could be better off buying your Euro’s before you lose out further. Speak to your CI account manager today.