The Euro to Pound Sterling (EUR/GBP) and Euro to US Dollar (EUR/USD) exchange rates were both trending lower in Friday’s European trading as Greek negotiations continued and Eurozone Industrial Production data slipped from 2.1% to 0.8% on the year in April.
Eurozone Data Adds Pressure to Euro (EUR) Exchange Rate amid Greek Negotiations
The month of April alone registered only 0.1% growth, while the March ecostat was negatively revised to -0.4%. The annual March figure was positively adjusted to 2.1%.
Economist Jessica Hinds commented: ‘April’s Industrial Production data add to the worrying body of evidence from the surveys that the Eurozone economic recovery may have slowed in the second quarter, after the first quarter’s less-than-spectacular 0.4% quarterly rise in GDP.’
Additionally, the situation in Greece appears to have gone from bad to worse, with the International Monetary Fund (IMF) pulling out its team of negotiators on Thursday.
Economist Robert Kuenzel commented: ‘Worrying signs on Greece mounted overnight. Negotiations with creditors remain log-jammed as Greece appears to be sticking to its position on pension reform, VAT changes and the overall pace of fiscal consolidation. Indeed the working dinner of senior Eurogroup officials reportedly issued a 24-hour ultimatum to the Greek authorities to present suitable proposals.’
The Euro to Pound Sterling (EUR/GBP) exchange rate is trending in the region of 0.7220.
The Euro to US Dollar (EUR/USD) exchange rate is trending at 1.1191.
US Dollar (USD) Exchange Rate Forecast to Climb on Favourable Confidence Stat
Meanwhile, the US economy had a relatively quiet week for data releases, with only US Advance Retail Sales and University of Michigan US Consumer Confidence being of note. US Advance Retail Sales rose by 1.2% in May while the April ecostat was positively revised from a flat 0.0% to 0.2%.
However, investors are still waiting for the University of Michigan Consumer Confidence figure which will be out later in Friday’s Wall Street trading.
The Pound (GBP) exchange rate had an interesting day on Friday, climbing impressively against the Euro but remaining in a tight range versus the US Dollar (USD).
The US Dollar to Pound Sterling (USD/GBP) exchange rate is trending in the region of 0.6452.
The US Dollar to Euro (USD/EUR) exchange rate is trending at 0.8939.
Pound Sterling (GBP) Exchange Rate Jumps after UK Construction Output Revision
The UK’s Construction Output figure changed dramatically from economists’ predictions and even led to the first quarter’s Gross Domestic Product (GDP) being revised higher.
Initially, economists had thought the UK’s Construction Output figure had reached 1.6% on the year in March and was destined to fall to 0.5%.
However, the actual ecostat was positively revised to a massive 5.0% in March, allowing the April figure to soften to 1.5%.
The UK’s GDP was upwardly adjusted from 0.3% to 0.4% in Q1, while the 2014 GDP reading was bolstered from 2.8% to 3.1%.
Markit economist Chris Williamson stated: ‘The UK economic upturn over the past year has been stronger than previously thought after substantial data revisions show that the construction sector has not acted as such a drag on the economy. The revisions bring the economy’s performance more into line with recent survey evidence.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending in the region of 1.5502.
The Pound Sterling to Euro (GBP/EUR) exchange rate is trending at 1.3853.