The Nations that power the Euro seem to be on the verge of downturns of their own after posting poor economic data.
Germany and France posted worse than expected PMI data on Thursday suggesting that the driving force of the Euro bloc is beginning to feel the heat of the turbulent economic furnace.
The two nations seem to be getting dragged down by the downturn, even as they draw up plans to deal with a Grexit. The Euro has taken a beating the last few weeks as investor’s tire of the political inactivity of the EU leadership. The battered single currency has dipped to its lowest levels in months against most of the key currencies.
The pound has inched up against the US dollar today but remains vulnerable to further decreases thanks to the ongoing Euro crisis and many investors seeking to move their funds to a safer currency.
“The downward revision to UK first quarter GDP, yesterday’s dire retail sales data, the downward trend in UK CPI inflation, worrying German survey data and strengthening headwinds from the euro zone all suggest the case for more QE from the BoE is mounting, Sterling will remain well supported versus the euro for now given the even worse risks facing the euro” said Jane Foley, senior currency strategist at Rabobank.
Finance experts Morgan Stanley have placed the pound on it ‘preferred currency selling list’ alongside the euro, claiming that ongoing risks from the weakening Eurozone will end up harming the UK economy due to the amount of trade between the two currencies.
The Euro has seen an increase against the Dollar. The single currency rose from its 22 month low against the greenback after Italian Prime Minister Mario Monti hinted that Greece will not leave the Eurozone. The 17-nation currency appreciated for the first time in four days against the yen amid speculation that its recent decline came too fast.
“Europe can have euro bonds soon,” Monti said in an interview on an Italian television station yesterday. ‘Germany has an interest in ensuring no country leaves the euro, while Greece will probably remain in the 17-nation currency region even as “anything can happen,” he said in the interview.
The euro was still headed for a more than 5 percent drop against the dollar and yen this month as a Greek opinion poll showed that the Syriza party an anti-bailout group was on course to win the upcoming elections.
The Pound to Euro exchange rate is currently trading at 1.251
The Pound to US Dollar exchange rate is currently trading at 1.568
The Euro to Australian Dollar exchange rate is currently trading at 1.281
The Euro to US Dollar exchange rate is currently trading at 1.253
The Euro to Pound exchange rate is currently trading at 0.799