While the Euro began the day in a stronger position against the Pound, the common currency was softer against the US Dollar and Yen ahead of the release of industrial production data for the Eurozone.
The Pound to Euro Exchange Rate is currently trading in the region of 1.1866 as of 11:00 GMT
With growth data for Germany, France and the Eurozone scheduled for release tomorrow, the Euro was feeling the pressure against its safe-haven peers.
As Alvin Tan of Societe General SA comments; ‘We continue to believe the Euro is a sell on rallies. We don’t think the recovery in the Euro area is particularly strong and expect the GDP data tomorrow to show growth momentum is definitely slackening. That will put downside pressure on the Euro.’
Early in to the European session the Euro gave up recent gains against the Pound as the British asset broadly strengthened in response to stronger than anticipated UK employment data.
With UK unemployment falling to 7.6 per cent from 7.7 per cent and the nation’s economy adding considerably more positions than forecast, the prospect of the Bank of England increasing interest rates before the 2016 guideline boosted the Pound against its rivals.
In the three months through September the unemployment rate was at its lowest level since 2009.
The figures also showed that jobless claims fell for a 12th month in October and inspired this reaction from economist Simon Wells; ‘With a stronger recovery, the Monetary Policy Committee is likely to judge that economic slack may be eroded slightly quicker. The MPC may shy away from bigger changes as that would require a significant change in its view about the supply side of the economy.’
In the immediate aftermath of the report’s release Sterling rallied against the Euro.
The Pound went on to extend gains against the Euro as industrial production in the Eurozone dropped by 0.5 per cent in September, month-on-month, rather than falling the 0.3 per cent expected. On the year, industrial production in the currency bloc increased by 1.1 per cent after falling by a revised 1.1 per cent in August.
The GBP/EUR Exchange Rate hit a low of 1.1802
The Bank of England’s inflation report, published at 10:30 GMT also had an impact on GBP/EUR trading.
Given the improvements seen in the UK employment and services sectors, the central bank now sees unemployment reaching its 7 per cent target by 2015.
The BoE also cut its near-term CPI prediction, forecasting that consumer-price increases will slow to just below the 2 per cent target before the end of the first quarter of 2015.
In the quarterly inflation report the BoE stated; ‘The near-term outlook for inflation is lower than expected three months ago, reflecting unexpectedly low outturns and the recent appreciation of Sterling. The economy is growing robustly as lifting uncertainty and thawing credit conditions start to unlock pent-up demand.’
If tomorrow’s GDP data for the Eurozone and its most influential economies meets or comes in below estimates the Euro could soften further before the weekend.
Current Euro (EUR) Exchange Rates
< Lower > Higher
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3419 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8428 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4436 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6341 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7445 >
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1866 >
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6921 <
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6112 <
(Correct as of 11:00 GMT)
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