Although the Euro/Pound pairing began the day under pressure, as Sterling adopted a bullish relationship with its peers ahead of this week’s UK growth data, the Euro has since climbed against its British rival.
The Euro to Pound Sterling Exchange Rate is currently trading in the region of 0.8597 as of 15:45 GMT
The expectation that this week’s UK GDP report will show that the UK economy expanded by 0.6 per cent in the second quarter, following growth of 0.3 per cent in the first three months of the year, buoyed the Pound through much of the European session. Sterling was also boosted as the birth of the future King of England inspired a bout of positive sentiment.
However, as the European session continued the Euro was strengthened by an unexpectedly large improvement in a consumer sentiment index for the 17-nation currency bloc.
The Euro to Pound (EUR/GBP) exchange rate hit a low of 0.8558 pence per Euro
Although economists expected the sentiment gauge to climb from -18.8 to -18.3 in July it actually advanced to -17.4, its best level since mid 2011.
The figures also showed that consumer confidence across the European Union strengthened from -17.5 in June to -14.8 this month.
After the figures were published industry expert Howard Archer asserted: “Eurozone consumer confidence extended its recent improvement in July to be at a 23-month high, likely driven by increased optimism about the economic outlook and a slightly less pessimistic view of the recent economic situation. Consumers were also likely relatively sanguine about the inflation situation and outlook.
“Hopefully, improving consumer confidence and the help to purchasing power coming from muted inflation across the Eurozone (just 1.6% in June) will provide increasing support to consumer spending and help Eurozone economic activity to stabilize and then finally start growing over the latter months of 2013. Even so, a marked overall pick up in Eurozone consumer spending still looks unlikely in the near term at least.
“Despite being at a 23-month high in July, confidence is still limited compared to long-term norms while Eurozone consumers continue to largely face high and rising unemployment, generally muted wage growth and tight fiscal policy. This is particularly, the case in the southern periphery countries but it is also true for countries such as France and the Netherlands.”
The Euro was also supported as the French Finance Minister Pierre Moscovici stated that France’s recession is over. Moscovici echoed the recent sentiments of the French President when he intimated that France should post positive growth in the second quarter of the year. He predicts expansion of 0.2 per cent.
Meanwhile, French business confidence hit a 15 month high in July, with sentiment increasing from 93 to 95. The improvement was better than economists expected, however some industry experts have stressed the necessity of seeing investment and employment boosted if the French economy is to take notable steps forward.
Eurozone news to watch out for tomorrow includes manufacturing/services PMI figures for both the currency bloc and Germany.
Current Euro (EUR) Exchange Rates
< Lower > Higher
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3183 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8597 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4285 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6489 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7583 <
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1633 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7002 <
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6056 >
(Correct as of 15:45 GMT)
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