Early in the week, E.U ministers stated they could accept a delay in Britain’s departure from the Bloc, but with conditions attached to extending Article 50 as May narrowly survived a Vote of No Confidence. The British Pound was the best performer in the last 5 days; it had an increase of 1%, 2.1% and 2.2% versus the USD, EUR and JPY respectively.
Draghi's ECB presentation last week suggested a shift in attitude as he not only highlighted downside risks but admitted that the Eurozone might be facing a prolonged downturn (but not quite a recession). With the ECB still needing a very expansionary policy, guidance on rates may not change significantly at next week's meeting. Investors are starting to speculate the ECB may well have missed their window of opportunity to raise rates, the probability of a rate hike by year end sits around 50%, it was 76% at the start of January.