Euro rates down as liquidity plan questioned

The Euro gained in value yesterday afternoon, after a Reuters report revealed that there is growing tension inside the European Central Bank around policies to increase liquidity and the leadership style of Mario Draghi.

Markets have been expecting the ECB to announce measures similar to the UK’s Quantitative Easing, as Mario Draghi (the Bank’s President) has been hinting in recent weeks. However, national central bankers in Eurozone countries are likely to challenge Draghi at tomorrow’s monthly meeting, with an argument likely to delay the onset of EU-QE. Monetary easing would dilute the Euro, making it cheaper, so delays or problems with the policy give the Euro strength, which is what we saw yesterday.

Tomorrow’s monthly meeting of the ECB and the associated press conference will now be key for the next movement for Euro exchange rates. For the latest news contact your currency broker; before yesterday’s move, rates for buying Euros hit their best for a month and close to recent highs, so today we are still looking at very good rates for those of you sending transfers in Euros.

UK construction hurts Pound

Yesterday’s UK construction PMI showed a surprise fall, pushing the Pound a little lower. There is no major UK data due out today, but tomorrow we have industrial and manufacturing production figures, which will be important for exchange rates. Along with the UK interest rate decision, which is virtually certain to show ‘no change’ for the UK’s base rate of 0.5%, there is also a GDP estimate at 3pm tomorrow.

Today’s other data includes Eurozone retail sales (10am). Overnight tonight we also have Australian unemployment, and this evening former Federal Reserve chairman Ben Bernanke gives a speech on the US economy, so currency values around the world could be on the move as the day’s events unfold.