As a turbulent week for the Euro to Pound exchange rate draws to a close, the Euro is fluctuating slightly against the Pound.
While a lack of UK news has restrained Sterling movement, the British asset fought back against the Euro on Friday following the release of a fairly neutral trade report for the Eurozone.
Figures published today showed that the 18-nation currency bloc recorded a stronger-than-expected trade surplus in March.
The non-seasonally adjusted surplus climbed from a positively revised 14.2 billion Dollars to 17.1 billion Dollars.
However, while this result was better than anticipated, the surplus was still down from a reading of 21.9 billion Euros from the same period of the previous year.
On a non-seasonally adjusted basis, the Eurozone’s surplus edged up from 15 billion Euros to 15.2 billion Euros.
Seasonally adjusted exports were down 0.5 per cent in March, not quite outpacing the 0.6 per cent decline in imports.
Separate figures showed that European car sales climbed at the slowest pace for five months in April.
Concerns regarding the Eurozone’s economic recovery resulted in a notable drop in sales in Germany.
As highlighted by industry expert Gianluca Spina; ‘The fall of car sales in Germany reflects consumers’ and investors’ concern that other European countries’ problems could have an impact internally. The latest economic figures from France and Italy are worrisome for the entire region.’
On Thursday the Euro broadly softened after growth figures for the Eurozone and several of its most prominent economies disappointed expectations.
While the French economy stagnated, the economies of Italy and the Netherlands contracted.
Despite the fact that Germany’s economy expanded by more than projected, the Eurozone was only capable of eking out growth of 0.2 per cent in the first quarter of the year.
The less-than-spectacular result helped the Pound recover some of this week’s declines against the Euro and left the Euro to Pound pairing below a 16-month high but little changed from its starting level.
Next week several factors will contribute to movement in the Euro to Pound exchange rate.
The Eurozone’s construction output/consumer confidence and manufacturing/services PMI will all be of particular interest.
Any further signs of weakness will add to the case for the European Central Bank introducing additional stimulus measures in June and could undermine the Euro.
Similarly, if the UK’s growth, retail sales and inflation figures impress it would increase the odds of a 2014 interest rate increase from the BoE, which could be Pound-supportive.
Euro Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,Pound Sterling,0.8163,
Euro,,US Dollar,1.3715,
Euro,,Canadian Dollar,1.4906,
Euro,,Australian Dollar,1.4662,
Euro,,New Zealand Dollar,1.5880,
US Dollar,,Euro ,0.7287,
Pound Sterling,,Euro,1.2254,
Canadian Dollar,,Euro,0.6706,
Australian Dollar,,Euro,0.6811,
New Zealand Dollar,,Euro,0.6292,
[/table]
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