The Eurozone might have emerged from a record long recession this year, but recent data has indicated that the currency bloc’s return to growth is fragile at best.
As a result of ongoing headwinds and economic concerns the European Central Bank opted to deliver a surprise rate cut at its last policy meeting, and reports published this morning have added to the case for the central bank taking proactive measures.
The Pound to Euro Exchange Rate is currently trading in the region of 1.1984 as of 11:00 GMT
The Euro edged lower against the Pound as the European session began and French manufacturing PMI came in at 47.8 in November, down from 49.1 in October and less than the 49.5 expected.
French services PMI also failed to meet expectations, slipping from 50.9 to 48.8, below the 50 mark separating growth from contraction.
Although both the services and manufacturing sectors of the Eurozone’s largest economy, Germany, expanded by more than expected, with growth in the Eurozone as a whole slowing this month there are clearly some serious issues to contend with.
Markit economist Chris Williamson said this of the results; ‘Some encouragement must be gleaned from the PMI signalling expansion of the Eurozone economy for a fifth successive month in November, but the average readings over the fourth quarter so far is signalling a very modest 0.2% expansion of GDP across the region, and it looks like momentum is being lost again.’
Williamson continued; ‘The fall in the PMI for a second successive month suggests that the ECB was correct to cut interest rates to a record low at its last meeting, and the further loss of growth momentum will raise calls for policymakers to do more to prevent the Eurozone from slipping back into another recession.’
As ‘doing more’ may involve introducing negative interest rates the Euro posted extensive declines against its currency peers after this data was released.
The GBP/EUR Exchange Rate hit a low of 1.1860
The Euro/Pound Sterling pairing also came under additional pressure as the UK’s budget deficit was shown to have narrowed in October, increasing the odds of the Chancellor of the Exchequer trimming his borrowing forecast in December.
This report compounds a trend which has become increasingly apparent in recent weeks, that of the UK’s economic recovery outstripping the Eurozone.
However, if today’s consumer confidence report for the Eurozone shows improvement the Euro could recover losses before the close of local trading.
Tomorrow’s German GDP report and IFO business climate survey could also give the common currency a boost before the weekend.
Current Euro (EUR) Exchange Rates
< Lower > Higher
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3428 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8345 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4445 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6292 >
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7448 >
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1984 >
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6903 <
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6136 <
(Correct as of 11:00 GMT)
Comments are closed.