Euro bulls were given a shot at pushing the Pound lower in the wake of the European Central Bank's March meeting, but their capitulation has confirmed Sterling enjoys formidable support around current levels.
The European Central Bank delivers their March policy meeting with most analysts suggesting President Mario Draghi will be keen to avoid any drama. Therefore, any surprises could well prompt a big move in the Euro exchange rate complex.
The Euro is likely to weaken due to persistently low inflation 'staying the ECB's hand' at their policy meeting on Thursday.
Next leg of the Euro's journey will depend on any shift in language and tone at the European Central Bank.
Coverage of the European Central Bank's January 2018 policy meeting outcome including analyst reactions and Euro price action.
The British Pound is trading near a make-or-break level against the Euro as we head into the key ECB meeting.
The EUR/USD has broken above 1.24 and the ECB might be challenged to communicate its latest monetary policy message without triggering further currency strength. Analysts give their views below on what to expect from Thursday's meeting.
Meetings of major central banks can be volatile events for currencies - we preview the European Central Bank meeting on Thursday with relation to its potential impact on GBP/EUR.
The Euro-to-US Dollar rate has risen swiftly and strongly over the last year, and although they see it going higher in the future, now may be a good time to take some profit as risks of a pull-back start to threaten.
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.
Latest Spot Market Exchange Rates:
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."
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