Pound euro exchange rate powers higher as EUR is hit by Draghi event risk

The GBP/EUR exchange rate will be looking to challenge 1.19 again; at 14:20 we see the pairing at 1.1899.

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"German elections and the stronger Chinese PMI have been the main developments for markets so far this week, and those have helped boost higher yielding currencies and put the EUR under a bit of pressure," says Shaun Osborne at TD Securities.

Osborne goes on to say: "for today, Draghi is speaking in front of the European Parliament, and considering he’s likely to reiterate his more dovish tone lately, that could add some pressure to the EUR along with the bit of uncertainty around German coalition talks after the election."

At the time of writing Draghi has not issued any surprises.

Merkel’s CDU party just missed a majority win in Germany which means coalition uncertainty could drag on for some time—never a positive for the EUR.  

That should leave German headlines an import issue for week; however, Draghi is likely to draw even more attention from the currency today, and several ECB speakers throughout the week should keep the focus on monetary policy.  

As per the most recent comments we’ve heard, most members are likely to emphasise the dovish case, and that could keep the pressure on the Single currency in the short term.  

The outlook for the week ahead

Below are the key risk events to watch out for this week:

• Tuesday 24th

1330 – Canadian retail sales
1500 – US consumer confidence
2345 – New Zealand trade balance

• Wednesday 25th

1330 – US durable goods orders

• Thursday 26th

0930 – UK GDP
1330 – US GDP

• Friday 27th

0005 – UK consumer confidence
1300 – German consumer inflation