Both the Euro to Pound Sterling (EUR/GBP) and Euro to US Dollar (EUR/USD) exchange rates were trending slightly lower as European trading progressed on Monday.
The Euro to Pound exchange rate shed over 0.25% as the appeal of the Pound was increased by yet more comments from Bank of England chief Mark Carney.
In another display of inconsistency, Carney indicated that interest rates could be increased before average wage growth reaches the rate of inflation.
According to Andrew Critchlow of The Telegraph, Carney’s remarks have ‘at times been interpreted by the markets as being contradictory to say the least. This was brutally apparent on the money markets last week when the Pound plummeted following the Governor’s remarks during the release of the Inflation Report when he appeared to suggest that rates would not go up until at least next year due to slow wage growth.’
Critchlow continued that Carney now seems to have gone back on those initial comments however, and ‘the apparent change in sentiment suggests that either Mr Carney is undecided about when the actual cost of borrowing should rise, or the true state of the British economy’.
Despite this inconsistency, the Pound did benefit from the remarks, posting widespread gains across the board.
The Euro to Pound Sterling (EUR/GBP) exchange rate hit a low of 0.7994.
The Euro to US Dollar (EUR/USD) exchange rate was holding steady having put on a mixed performance at the close of last week.
The US Dollar fluctuated in response to both better and worse than expected economic reports for the world’s largest economy.
While the level of industrial and manufacturing production was shown to have increased by more than anticipated, the University of Michigan Confidence gauge surprised expectations by dropping to 79.2 from 81.8.
A reading of 82.5 had been anticipated.
Both the Euro to Pound and Euro to US Dollar exchange rates were barely affected by the Eurozone’s trade figures.
The data showed that the Eurozone’s trade surplus expanded by more-than-anticipated in June on a year-on-year basis.
On a seasonally adjusted basis, exports were shown to have increased by 3.0% on the year, while imports climbed by 2.0%.
However, this moderately positive result is likely to be wiped out in July when the impact of the sanctions imposed on Russia begins to be felt.
Euro to Pound Sterling (EUR/GBP) and Euro to US Dollar (EUR/USD) Exchange Rate Forecast
Over the next five days, movement in the Euro to Pound and Euro to US Dollar exchange rates could experience volatility in response to the Eurozone’s current account data, German producer price figures, Eurozone construction output and Manufacturing, Services and Composite PMI for the Eurozone and its two largest economies.
Of course, data from the US and UK will also be of interest.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.8006.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.3392.
Euro to Pound (EUR/GBP) Exchange Rate Gains, Euro to US Dollar (EUR/USD) Remains Steady
The Euro to Pound exchange rate is currently trending in the region of 0.8021. The fractional gain from yesterday is most likely due to this morning’s less-than-ideal UK domestic data.
The UK Consumer Price Index failed to meet expectations of a slight dip from 1.9% to 1.8%, posting a disappointing drop to 1.6%. Similarly the Retail Price Index was predicted to fall from 256.3 to 256.2, but the actual result showed a decline to 256.0. The impact of this data, thus far, has been fairly minimal. This is likely to be a result of the increased demand for Sterling after Bank of England governor Carney’s intimations towards a pre 2015 rate hike.
The Euro to US Dollar exchange rate is trending around 1.3348. Movement has been relatively static given that the Euro has had little by way of influential domestic data today, and the US data is not due for release until later this afternoon.
Euro Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,Pound Sterling,0.8005,
Euro,,US Dollar,1.3392,
Euro,,Canadian Dollar,1.4584,
Euro,,Australian Dollar,1.4371,
Euro,,New Zealand Dollar,1.5787,
US Dollar,,Euro ,0.7467,
Pound Sterling,,Euro,1.2491,
Canadian Dollar,,Euro,0.6856,
Australian Dollar,,Euro,0.6958,
New Zealand Dollar,,Euro,0.6334,
[/table]
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