Increased QE Forecast to Propel Pound Sterling Euro Exchange Rate Northwards GBP EUR

October 15, 2015 - Written by John Cameron

STORY LINK Increased QE Forecast to Propel Pound Sterling Euro Exchange Rate Northwards GBP EUR

EUR Exchange Rate ALERT: ECB Comments Drive Euro Exchange Rate Lower

The Euro (currency : EUR) has significantly underperformed during today’s session following comments from a leading European Central Bank (ECB) policymaker.

Ewald Nowotny, the head of Austria’s central bank, who also sits on the ECB’s board, stated at a conference in Poland earlier today that the, ‘ECB is using the monetary policy instruments available - but it is quite obvious that in the current macroeconomic situations, additional sets of instruments are necessary.’ He went on to assert that, ‘the severe crisis we experienced has reminded policymakers of the pitfalls of an incomplete monetary union.’ It was the first time that one of the ECB’s ratesetters has confirmed his belief that the current €65bn per month Quantitative Easing programme being pursued by the euroland’s reserve bank is simply insufficient.

Pound Sterling to Euro Conversion Rate at 8-Month Low after UK CPI

The Pound Sterling euro exchange rate slid to an 8-month low of 1.3346 GBP EUR in the aftermath of Tuesday’s UK inflation data which pointed to falling prices in the domestic economy last month. A short time ago, the pair had climbed to an intraday high of 1.3575 GBP EUR, with the majority of analysts now forecasting further near-term gains for the pair.

Foreign Exchange News Now: US Dollar Predicted to Gain on Inflation Data

Elsewhere, the US Dollar’s (currency : USD) torrid week could be about to get better following the publication of the latest American inflation numbers a short time ago. Analysts had been expecting the official data to reveal that the world’s largest economy had slipped back into deflation last month, so the showing of zero per cent came as a relief for investors holding the Buck. The fact that the US Consumer Price Index excluding food & energy prices showed a healthy underlying level of American price rises of 1.9% provided some reason for the US Federal Reserve to consider an interest rate hike. Such a move is highly unlikely to be announced at this month’s Fed meeting, but a December rate increase is still forecast by many FX insiders.

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TAGS: Currency Predictions Daily Currency Updates Poun Forecasts