Yesterday the common currency fell to a three-week low against the US Dollar as European Central Bank President Mario Draghi asserted that the 17-nation currency bloc would require the central bank’s fiscal stimulus measures to remain accommodative for some time to come. The Euro was also adversely affected by three pieces of influential, and better-than-forecast, US data – which upped the odds of the Federal Reserve tapering stimulus before the close of the year.
The Euro Exchange Rate was in the region of 1.3044 against the US Dollar as of 10:45 GMT
After this morning’s data releases for the Eurozone the Euro was little changed.
According to a survey compiled by the GfK institute, a forward-looking consumer climate index for Germany advanced from 6.5 for June to 6.8 for July – the best reading for nearly 6 years. The result allowed German stocks to rally by the most for two-weeks.
Meanwhile, a separate report confirmed earlier data showing that French GDP contracted by 0.2 per cent in the first three months of the year compared with the final quarter of 2012. As the fourth quarter of last year also posted economic contraction of 0.2 per cent France is now officially in a recession.
Statistics agency Insee also showed that consumer spending in France declined by 0.1 per cent in the first quarter (QoQ) while exports dropped 0.4 per cent and investment of non-financial companies slipped 1 per cent.
The Euro hit a low of 0.8444 against the Pound (EUR/GBP)
Also this morning, ECB President Mario Draghi was quoted as stating that any Eurozone nations attempting to trim their budget deficits need to limit tax hikes and instead focus on growth-boosting investment.
During a speech given at the French National Assembly in Paris Draghi remarked that nations should ‘ensure that fiscal consolidation, which is necessary to contain debt levels, is made as growth-friendly as possible. Relying less on tax increases would help sustain citizens’ disposable income. Prioritizing capital investment over current spending would do more to lay the foundations for future growth […] It is important to acknowledge that there are limits to what monetary policy can achieve. Monetary policy cannot create real economic growth. If growth is stalling because the economy is not producing enough or because firms have lost competitiveness, this is beyond the power of the central bank to fix.’
The Euro continues to trade below 1.31 against the US Dollar. Although this afternoon’s US data could cause Euro movement, investors will largely be looking ahead to tomorrow’s potentially volatile German unemployment figures.
Current Euro (EUR) Exchange Rates
< Lower > Higher – Little Changed
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3044 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8488 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4040 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6822 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7666 >
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1782 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7119 >
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.5934 >
(Correct as of 10:45 GMT)
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