While the Pound began the European session little-changed against the Euro the British asset later slipped against its common currency rival as a gauge of economic sentiment in Germany produced its strongest reading for four-years.
The Pound to Euro Exchange Rate is currently trading in the region of 1.1922 as of 11:00 GMT
The German ZEW current situation survey unexpectedly slipped from 29.7 to 28.7 in November rather than climbing to 31.0 as forecast, but an index of economic sentiment for the Eurozone’s largest economy leapt from 52.8 to 54.6, beating expectations for a reading of 54.0.
The result was the best recorded since 2009.
Clemens Fuest, President of the Centre for European Economic Research (ZEW), issued this statement with the figures; ‘Economic expectations for Germany have been hovering at a high level for months. The slightly improved economic outlook for the Eurozone might have contributed to this development.’
Meanwhile, a measure of economic sentiment for the Eurozone advanced from 59.1 in October to 60.2 this month, as predicted.
In the aftermath of the data release the Euro broadly strengthened, although gains were slightly limited by a report showing a 1.3 per cent decline in construction output (month-on-month) in the 17-nation currency bloc.
Augusts’ construction output gain was negatively revised to 0.3 per cent. Construction output was down 0.2 per cent on the year.
The GBP/EUR Exchange Rate hit a low of 1.1876
The Euro rally was also restrained as the Organization for Economic Cooperation and Development slashed its global growth forecasts and limited demand for higher-risk assets.
In the words of an OECD economist; ‘Most of the emerging economies have underlying fragilities that mean they cannot continue growing as they used to. They used to be an important support engine for global growth in bad times. Now the reverse is true and advanced economies can’t be said to be in very good times again.’
The OECD now expects the global economy to expand by 2.7 per cent in 2013, down from a previous estimate of 3.1 per cent.
However, the Eurozone is expected to put in a better performance than previously forecast, contracting by 0.4 per cent this year instead of 0.6 per cent.
Of the Eurozone’s return to growth the OECD economist commented; ‘In Europe, monetary policy could be more supportive. We think deflation is a risk.’
Tomorrow the release of minutes from the Bank of England’s latest policy meeting is likely to be the main driver of GBP/EUR movement.
Current Euro (EUR) Exchange Rates
< Lower > Higher
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3499 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8386 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4335 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6202 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7401 <
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1922 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6969 >
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6175 >
(Correct as of 11:00 GMT)
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