The Pound has climbed above the 1.21 level to trade at a one-year high against the Euro after the Bank of England and European Central Bank both maintained interest rates at record lows. Against the US Dollar the single currency fell to a one-week low.
The ECB chose to maintain its monetary policy and kept rates at the record low level of 0.25% suggesting that deflation remains a major concern for policy makers as the Eurozone economy remains painfully weak.
The decision to not change policy disappointed some investors who believe that Bank President Mario Draghi is going to have to take action sooner rather than later to try and bolster the economy. Unemployment remains shockingly high across the region and reports released yesterday showed that inflation in the Euro area fell further away from the bank’s target of close to 2%.
In his news conference following the rate announcement Mr. Draghi dismissed the significance of the inflation data, calling it an expected reflection of lower inflation in the services part of the European economy. Draghi however did acknowledge that a worsening of inflation or a tightening of money-market rates could be triggers for further moves by the central bank.
“It looks like they are emphasizing that they are watching and ready, Draghi has been more dovish, so that’s why we are seeing the Euro go lower but I’m not sure this will be sustained because the issue is what impact any policy has on the market rates,” said a chief economist.
The Bank of England chose to maintain interest rates at 0.5% and its quantitative easing target at £375 billion. Speculation has risen in recent weeks that a rate rise could occur sooner than expected as the UK economy continues to post strong data.
Current Euro (EUR) Exchange Rates
< Lower > Higher
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3572 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8242 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.5275 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6437 >
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7366 >
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.2130 >
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6546 <
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6082 <
(Correct as of 14:30 pm GMT)
Comments are closed.