The Euro has weakened against the Pound and has fallen from a six-week high against the US Dollar after the European Central Bank decided to leave interest rates at a record low level of 0.5% following signs that the European economy is improving.
The single currency weakened against the majority of its most traded peers as the news broke.
The Central Bank’s decision to keep its refinancing rate at a record low level was predicted by the majority of economists. The currency’s decline occurred despite earlier data releases showing that manufacturing in the Eurozone expanded in July. The first time the sector has shown growth in two years.
“The recent data in the Euro area has been rather good,” said Christoph Kind, head of asset allocation at Frankfurt Trust in Frankfurt. “You could in principle say that the recession is over. The ECB could argue that the data are proof that the expansive monetary policy is bearing fruit, but it’s by no means the time to change their guidance.”
Weighing upon the Euro Pound pair was the release of data showing that the UK manufacturing sector grew strongly in July, beating economist expectations. Political uncertainty in Spain is also weighing upon sentiment as Spanish Prime Minister Mariano Rajoy was derided as a liar by the leader of the opposition. The PM rebuffed calls that he resign as fights against corruption allegation in the Spanish Parliament.
“While the survey data have continued to remain consistent with the ECB’s recovery scenario, we expect Draghi to reaffirm that the risks to the economic outlook remain to the downside,” said Nick Matthews, senior European economist at Nomura International Plc. “He will stress a dovish tone.”
Current Euro (EUR) Exchange Rates
< Lower > Higher
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3245 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8735 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4761 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6639 >
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7550 >
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1448 >
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6774 <
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6010 <
(Correct as of 14:25 pm GMT)
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