The Euro fell against the Pound but managed to remain firmer against the US Dollar following the release of UK GDP data.
The single currency briefly made gains against its rivals early in the session after news out of German confirmed that the Eurozone’s largest economy finally has a government. Angela Merkel’s two month long aim of trying to form a coalition was achieved in the early hours of Wednesday morning and will see her Christian Democrats party from a government with the Social Democrats. The two sides agreed on the implementation of a minimum wage and increased spending on pensions and welfare without the need for tax hikes.
As a result of the deal the Euro reached a four-year high against the Japanese Yen.
The Euro was also supported by positive German consumer confidence data and as retail sales in Spain came in better than expected with the recorded decline of -0.5% coming in below the forecasted drop of -1.37%. Consumer confidence data out of France also disappointed when it came in at 84, below the hoped for target of 85.59.
The currency slipped however after UK GDP expanded by 0.8% on a quarter by quarter basis and by 1.5% on a yearly one. Both figures matched economist forecasts.
The Euro was also knocked by rising speculation that the European Central Bank could add more stimulus measures at its next policy meeting.
“Inflation keeps surprising to the downside in terms of economist forecasts so there’s obviously a chance the ECB are going to have to do something. Another LTRO when the when the existing ones get below one year to maturity is quite likely. People still have enough faith that the ECB will do something to respond to think its safe to be dipping into these peripheral markets, especially in shorter maturities,” said a strategist at Bank of America Corp. based in London.
The market’s attention is now focused on this afternoon’s plethora of reports from the US which include jobless claims figures and goods orders.
Current Euro (EUR) Exchange Rates
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3587
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8376
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4912
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6581
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7359
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1938
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6706
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6031
(Correct as of 10:45 am GMT)
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