European Central Bank

EUR/USD spikes higher in overnight trading before pulling back: Charts continue to suggest further upside over coming weeks and months, according to analysts.

The Euro is on a firm footing, particularly against Sterling, although some doubt this can continue. Progress in German coalition talks might see doubters proven wrong.

Below target inflation and continued currency strength could undermine market hopes of an end to quantitative easing in 2018, placing the Euro at risk.

The Pound-to-Euro rate could touch 1.1300 Thursday and reach as high as 1.1450 over the coming weeks but evolving market expectations for what the Bank of England does beyond November will be key.

Image (C) European Central Bank.

Highlights:

1. Value of the Euro features prominently
2. October will be when the ECB signals plans for withdrawal of quantitative easing programme
3. Euro shoots higher as Draghi and Governing council signal a relaxed stance with the currency's valuation
4. Inflation forecasts downgraded for 2018, but less than many Euro bulls had feared
5. ECB confident the Eurozone economy is strengthening at a satisfactory pace

Latest Spot Market Exchange Rates:

1. Pound-to-Euro exchange rate: 1.0912, down 0.3%
2. Euro-to-Pound Sterling exchange rate: 0.9187
3. Euro-to-Dollar exchange rate: 1.2037, up 0.67%

The European Central Bank delivers key guidance on the future direction of their monetary policy at 12:45 B.S.T. followed by a press conference 45 minutes later.

A poor showing from the EZ services sector and falling retail sales drove the Euro lower in London and could give the ECB the ammunition it needs to kick the currency even lower still.

Central banks are likely to set the tone for both the British Pound and Euro over coming weeks, and according to one analyst, this offers the GBP/EUR exchange rate potential relief.

With Ardo Hansson having poured cold water all over concerns about "euro strength", has a "Draghi Put" from Jackson Hole become less likely?

Pound Sterling and the Dollar are seen advancing on the Euro thanks to developments concerning the European Central Bank.

"It's true there have been movements in bond price, asset price, exchange rates and so on," noted Draghi, "but financing conditions remain supportive."

Why prompting a decline in the value of the Euro might be a strategy deployed by the ECB at its July meeting.

The Euro jumped higher against the Dollar and Pound Sterling following the release of the minutes of the European Central Bank's monthly policy meeting which suggest the taps on ease monetary policy are soon to be turned off.

Mario Draghi sent the Euro soaring in early morning European trade when he indicated that ECB policy may soon move to neutral from accommodative and stated that the recovery in the Eurozone is in full bloom.

The European Central Bank should soon start discussing the end of its unprecedented stimulus programme in response to improving economic growth and inflation says Bundesbank president Jens Weidmann.

The Euro exchange rate complex is under pressure on news that the European Central Bank is to cut inflation forecasts.

One of the UK’s best-known high-street lenders has reaffirmed their view that Sterling is unlikely to advance further than current levels against the Euro.

ECB President Mario Draghi prompts weaker Euro on Thursday, April 6 with warning that they will continue to support the Eurozone economy until inflation is growing at a sustainable rate. 

Willem Verhagen, Senior Economist, Macro & Strategy at NN Investment Partners suggests the ECB are unlikely to deliver the kind of action on quantitative easing that those who are looking for a stronger Euro in 2017 are expecting.

The Euro could be about to be hit by a massive hammer in the shape of the European Central Bank with analysts at a prominent Scandinavian research house saying another round of quantitative easing is coming.