With developments in the US inspiring significant market movement over the weekend, the Euro began the week at a two-week high against the US Dollar. However, the common currency remains trapped in a bearish relationship with the Pound as investors continue to favour the British asset in light of a recent stream of encouraging UK data.
The Euro to Pound Exchange Rate is currently trading in the region of 0.8377 as of 10:50 GMT
Over the weekend it emerged that Former Treasury Secretary Lawrence Summers, a major contender for the position of Chairman of the Federal Reserve and supporter of tapering quantitative easing, has opted to remove himself from consideration for the post. It now appears increasingly likely that Vice Chairman Janet Yellen will head up the central bank when current Chairman Ben Bernanke steps down in January.
According to one industry expert; ‘Markets will most likely interpret this as significantly increasing the probability of broad policy continuity. Yellen’s renewed front runner status would be viewed by markets as moderating the expected pace of additional taper, as well as increasing the scope for more aggressive use of forward guidance.’
While this shocking news resulted in significant market movement (notably triggering widespread ‘Greenback’ declines) the publication of inflation data for the Eurozone inspired minimal movement this morning.
As expected by economists, consumer price inflation stagnated in August, holding at a seasonally adjusted 1.3 per cent year-on-year last month.
The result was unchanged from an initial estimate and significantly below the European Central Bank’s near 2 per cent target.
CPI rose 0.1 per cent in August, month-on-month, as previously estimated.
Although the Euro modestly extended gains against the US Dollar following this data release the common currency was little changed against the Pound.
The EUR/GBP Exchange Rate hit a low of 0.8331
Overnight the Euro weakened against its British rival as Sterling was supported by Rightmove Plc increasing its forecast for UK house price growth in 2013.
In the hours ahead further EUR/USD movement could occur in response to US industrial/manufacturing data.
A lack of UK news is likely to limit EUR/GBP fluctuations for the rest of the European session, but tomorrow’s UK consumer and producer price indexes will be influential.
If the inflation reports add to the increasing signs of UK economic recovery the Euro could soften further against its British counterpart.
Current Euro (EUR) Exchange Rates
< Lower > Higher
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3344 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8377 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4260 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6301 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7542 >
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1939 >
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7012 >
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6140 >
(Correct as of 10:50 GMT)
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