Pound Euro Exchange Rate GBP EUR Jumps Following Draghi QE Comments

November 20, 2015 - Written by Tim Boyer

STORY LINK Pound Euro Exchange Rate GBP EUR Jumps Following Draghi QE Comments

GBP/EUR Conversion Rate hit BEST of 1.4316 Today

The Pound Sterling (currency : GBP) posted strong gains against the euro (currency : EUR) during this morning’s session following comments from European Central Bank Chief Mario Draghi at the European Banking Congress.

The Sterling euro exchange rate jumped to as high as 1.4316 GBP EUR following the Italian moneyman’s assertion earlier today that, ‘if we decide that the current trajectory of our policy is not sufficient to achieve our objective, we will do what we must to raise inflation as quickly as possible,’ was taken by many analysts as a clear indication that his Bank is set to ramp up its controversial Quantitative Easing programme next month.

Draghi went on to cement his earlier comments by stating that, ‘if we decide that the current trajectory of our policy is not sufficient to achieve our objective, we will do what we must to raise inflation as quickly as possible.’

GBP Gains Limited after Poor British Borrowing Data

The gains for Sterling against the euro on the day would have been greater were it not for another dire set of UK public borrowing figures, out earlier.

The official data showed that Public Sector Net Borrowing jumped to £8.2bn last month – up by £1.1bn on October 2014’s counterpart print. This made it the worst October public borrowing figure since 2009.

John Hawksworth of PwC observed earlier that, ‘monthly data can be volatile, but the cumulative public borrowing total for the first seven months of the financial year was also only £6.6 billion lower than a year earlier, as compared to an OBR forecast in July that borrowing for 2015/16 as a whole will be around £20 billion lower than in 2014/15. Central government tax receipts have grown by 3% so far this financial year as compared to an OBR forecast of 3.6% for 2015/16 as a whole.’

The forecast for the Pound Sterling is now neutral at best, given the parlous state of Britain’s public finances.

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TAGS: Euro Forecasts Pound Euro Forecasts Pound Sterling Forecasts