Early December promises great opportunity for those positioned either side of th

e pound / euro conversion as the European Central Bank (ECB) is widely expected
to lower interest rates and expand their quantitative easing programme on Decemb
er the 3rd.
Ahead of the event we are seeing sterling fall back to 1.42 as markets cut back
on exposure to the pair following days of gains.
However we see major issues arising from the confidence markets have placed in t
he ECB to deliver something spectacular - the euro has been sold on such assumpt
ions and disappointments will see panic buying unfold.
Those looking for a higher euro from which to conduct their international paymen
ts will therefore be hoping the ECB underwhelms on the aggression of the announc
ed easing.
Such a move will be welcomed by euro-sellers as a study of the yearly charts con
firms the euro is at its lowest levels against the pound sterling since 2006.
A pipeline of ECB communication ahead of the Thursday event has delivered regula
r news for markets to digest and sell the euro further. Recently, and under con
ditions of anonymity, an ECB official indicated that options for December s ECB ra
te decision meeting are still being debated.
One official was quoted as saying the ECB "are still trying to figure out what w
ill be in the package. A lot of people have different views."
One such option would include introducing two-tiered deposit rates and buying re
-bundled loans on non-performing loans.
The purchase of debt issued by towns and regional administrations is even said t
o be up for grabs.