Last Thursday saw the ECB interest rate decision and the Euro soared on the back of Mario Draghi’s speech. Although rates remained unchanged Draghi comments appeared to be paving the way for taking action on the quantitative easing program in October. Draghi also didn’t seem concerned when questioned regarding recent Euro strength, as a result the single currency continued to make serious gains and reached 1.20 against the Dollar.
USD had a tough week as the Greenbank lost ground on its major pairings with economic uncertainties and fears for Hurricane Irma striking the state of Florida. Fears that the Hurricane could cost Insurers $150 billion as well as the cost for Hurricane Harvey which devastated Texas the week before. GBP/USD ended the week at 1 month highs as the rate broke through the 1.32 mark.
Sterling had a slow start to the week as Brexit negotiations drew to a close and the UK and EU were no closer to reaching an agreement. Markets are worried that the UK is at risk of leaving the EU in March 2019 without a trade agreement in place. Friday however saw the Pound bounce back as strong economic data came out of the UK. This saw GBP/EUR reached 3-week highs and a much needed boost for the Pound. All eyes will be on the bank of England on Thursday with BOE interest rate decision. Although the BOE isn’t expected to raise interest rates markets will be listening to Mark Carney as any mention of rate hike next year could see volatility in the Pound.