European Central Bank

The pound sterling appears to have broken out of a mid-term downtrend.

The euro to dollar exchange rate will not suffer greatly should the European Central Bank expand its asset purchase programme (Quantitative Easing / QE).

Policy divergence between the US Federal Reserve and the European Central Bank will pressure the euro to dollar exchange rate (EURUSD) below 1.00 over the course of the next year.

Expect the euro's strength to be undercut when the European Central Bank announces an extension to the quantitative easing programme, and even another interest rate cut.

The British pound to euro exchange rate (GBPEUR) has advanced following further signs the European Central Bank is looking to expand its quantitative easing programme.