Euro to Pound Exchange Rate Falters, GBP to Euro Gains by Most for a Month

Over the course of trade on Tuesday the Euro to Pound pairing softened in the wake of unexpectedly upbeat UK economic reports.

A surprise rebound in British industrial and manufacturing production drove the Pound higher against the majority of its currency rivals and helped Sterling push above the 1.21 level against the Euro.

On the year industrial production climbed by 2.7 per cent in February following a month-on-month gain of 0.9 per cent which was stronger than anticipated.

Manufacturing production jumped by 1 per cent on the month and 3.8 per cent on the year versus expectations for a monthly gain of 0.3 per cent and an annual advance of 3.1 per cent.

The production data prompted this response from currency strategist Jane Foley; ‘The market is becoming more confident on the outlook for Sterling. There is a large consensus in the market regarding when the Bank of England will next move policy.’

The Pound edged up by 0.4 per cent against the Euro.

Further Sterling gains could occur if today’s UK GDP estimate for March confirms that that the UK economy put in a strong performance at the close of the first quarter of 2014.

However, the Euro largely held gains against the US Dollar following the release of French trade data.

The report showed that the Eurozone’s second largest economy recorded a narrower than expected trade deficit in February.

According to official data, the deficit fell from 5.61 billion Euros in January to 3.36 billion Euros in February as imports notably declined.

Exports also decreased slightly from 36.31 billion Euros to 36.24 billion Euros.

Economists had expected the deficit to narrow to 5 billion Euros.

Meanwhile the Bank of France business sentiment gauge advanced from 98 in February to 99 in March.

While these reports are positive they had little impact on the Euro as investors are holding off ahead of the release of minutes from the latest Federal Open Market Committee meeting and tomorrow’s German trade figures.

The German trade data is expected to show a current account surplus of 18.0 billion Euros in February following a 0.1 per cent monthly increase in exports and a 0.5 per cent decrease in exports.

Tomorrow’s UK trade balance figures may also have an impact on the GBP to Euro pairing.

Euro Exchange Rates

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate , 
Euro,,Pound Sterling,0.8233,
Euro,,US Dollar,1.3763,
Euro,,Canadian Dollar,1.5038,
Euro,,Australian Dollar,1.4747,
Euro,,New Zealand Dollar,1.5901 ,
US Dollar,,Euro ,0.7265,
Pound Sterling,,Euro,1.2143,
Canadian Dollar,,Euro,0.6649,
Australian Dollar,,Euro,0.6775,
New Zealand Dollar,,Euro,0.6293,
[/table]