The Euro to Swiss Franc (EUR/CHF), Euro to British Pound (EUR/GBP), Euro to Egyptian Pound (EUR/EGP), Euro to Canadian Dollar (EUR/CAD), Euro to Emirati Dirham (EUR/AED) and Euro to Russian Ruble (EUR/RUB) exchange rates were all trending lower on Wednesday as negotiations between Greece and its creditors continued.
Thursday saw another hurdle emerge between Greece and its creditors when Germany said it would oppose an extension for Greece’s austerity deal while long-term plans were arranged.
Earlier… However, the Euro to British Pound (EUR/GBP) exchange rate began to fall after the UK Unemployment Rate slipped from 5.8% to 5.7% in January. In addition, Jobless Claims Change fell by -38.6K. Employment Change shot up from the forecast 50K to 103K.
Furthermore, Average Weekly Earnings rose from a positively revised 1.8% to 2.1%.
Greece may ask for a loan extension while finance ministers discuss a long-term deal.
Industry expert Michael Hewson commented: ‘ECB President Mario Draghi is unlikely to want to go down in history as the man who pulled the plug on Greece and undermine the irreversible nature of the Euro.’
Earlier… The Euro to Swiss Franc (EUR/CHF), Euro to British Pound (EUR/GBP), Euro to Egyptian Pound (EUR/EGP) and Euro to Emirati Dirham (EUR/AED) exchange rates have been trending higher on Tuesday while the Euro to Canadian Dollar (EUR/CAD) exchange rate softened.
As ongoing negotiations between Greece and its creditors continue, speculation heightens as to the outcome of this week’s meetings. Greece finance minister Yanis Varoufakis and Prime Minister Alexis Tsipras have suggested that they will not make a deal under pressure and the newly elected government will put in place the policies it won the election with.
Tsipras commented: ‘There has been a custom that newly elected governments act differently from their pre-election promises. I am saying it again, we are thinking of actually implementing out promises for a change.’
Euro (EUR) Exchange Rate Supported by ZEW Economic Surveys
However, the Euro could be on course to gain further after the ZEW German and Eurozone Economic Sentiment Surveys recorded upbeat growth and the German Current Situation Survey jumped beyond forecasts.
Economists had predicted a rise from 48.4 to 55.0 in the German Economic Sentiment Survey; however, a slightly smaller increase occurred, with the February ecostat residing at 53.0. Meanwhile, the Eurozone Economic Sentiment Survey rose from 45.2 to 52.7.
However, perhaps most impressively, the German Current Situation Survey rocketed from 22.4, past the 30.0 forecast, to reside at 45.5.
ZEW president Professor Clemens Fuest commented: ‘Quantitative easing [QE] by the European Central Bank [ECB] and unexpectedly high economic growth in the fourth quarter of 2014 have improved sentiment among financial market experts. On the other hand, the intensification of the Ukraine crisis and the collision course of the new Greek government are dampening expectations.’
The Euro has remained remarkably resilient amid ongoing summits between Greece and its creditors regarding its austerity deal.
UK Headline Inflation Rises to 1.4% in January – British Pound (GBP) Supported
Meanwhile, UK headline inflation managed to increase in January, rather than falling as forecasts had suggested. The Core Consumer Price Index (CPI) rose from 1.3% to 1.4% rather than declining to 1.2%.
However, the non-core measure took a dive from 0.5% to 0.3% as a result of tumbling oil prices.
The Office for National Statistics (ONS) stated: ‘Falling prices for motor fuels and food were the main contributors to the slowdown in the rate of inflation.’
Swiss Franc (CHF) Exchange Rate Fluctuations Forecast on SNB Statements and ZEW Survey
The Swiss Franc to Euro (CHF/EUR) exchange rate could fluctuate in coming days with Swiss National Bank (SNB) President Thomas Jordan expected to speak later in Tuesday’s session and ZEW’s Swiss Expectations Survey out on Wednesday.
The January expectations index resided at -10.8 and any positive change in the February ecostat could boost the Swiss Franc to Euro (CHF/EUR) exchange rate.
Egyptian Pound (EGP) Exchange Rate Feels Effects of Libya Fallout
The Egyptian Pound to US Dollar (EGP/USD) exchange rate was kept steady at 7.53 on Monday in an Egyptian central bank auction; however, the currency was still able to climb on the black market. The auctions are held on Sundays, Mondays, Wednesdays and Thursdays as the central bank makes the decision on whether to stabilise the currency.
The Egyptian government is attempting to bolster economic growth and therefore clamping down on the black market.
However, the Egyptian Pound can experience volatility as conflict between the Egyptian government and ISIS rebels continues to flare. Egyptian President Abdel Fattah el-Sissi ordered air strikes on militants in Libya in retaliation for the execution of 21 Christian Egyptians.
Emirati Dirham (AED) Exchange Rate Sensitive to Oil Prices and Weak Euro (EUR)
The Emirati Dirham has been sensitive to oil price changes in recent months—a circumstance that could continue in coming weeks.
One industry expert commented: ‘Falling oil prices and a weakening Euro could be of a concern for the overall UAE economy.’
Canadian Dollar to Euro (CAD/EUR) Exchange Rate Gains as Oil Prices Increase on Libya Fears
Meanwhile, the Canadian Dollar to Euro (CAD/EUR) exchange rate climbed as the ‘Loonie’ tracked the rising price of oil. The value of black gold increased as fears over the situation between Egypt and ISIS militants in Libya escalated.
The Egyptian bombing run took place over the El Sarir oil field and caused fears that production may be stunted.
Euro Exchange Rate Forecast: EUR/GBP, EUR/CHF, EUR/CAD, EUR/EGP, EUR/AED
The Euro is expected to be extremely sensitive to the ongoing meetings between Greece and its creditors and any whiff of a ‘Grexit’ could see the Euro exchange rate plummet. The possibility of Greece leaving and recovering well could spark a domino effect amongst other nations and see further exits from the currency bloc.
The European Central Bank (ECB) is scheduled to publish its Account of Monetary Policy Meeting on Thursday, which could be a big mover for the single currency.
The Euro to British Pound (EUR/GBP) exchange rate is trading in the region of 0.7411. The Euro to Swiss Franc (EUR/CHF) exchange rate is reaching 1.0620. The Euro to Egyptian Pound (EUR/EGP) exchange rate is residing at 8.6967. The Euro to Emirati Dirham (EUR/AED) exchange rate trades at 4.1891. The Euro to Canadian Dollar (EUR/CAD) exchange rate is trending in the region of 1.4119.