The Euro climbed to its highest level in a week against the Pound on Wednesday as concerns over a slowing UK house market weighed on Sterling and better-than-expected Eurozone sentiment gave support to the single currency.
The Pound turned lower against the Euro after a report by the British Bankers Association released yesterday showed that UK banks approved the lowest amount of mortgages since August last month.
The Nationwide Building society added to investor concerns of a slowdown today after it warned that the London property market is starting to show signs of slowing and said that prices could begin to fall over the summer.
The Pound was also weakened by a report released by the Confederation of British Industry which showed that UK retail sales have slowed this month after surging over the Easter break.
The CBI said that 38% of retailers have sold more goods this month while 22% sold less. The net balance is now +16; down from last month’s +30.
The Euro meanwhile managed to shrug off weaker-than-expected German employment data and push higher after data showed that economic sentiment across the Eurozone climbed to a 34-month high and consumer confidence hit its best level in 79-months in May.
“Most business sectors saw sentiment improve in May after a widespread dip in April that appeared to partly reflect concerns over the Ukraine crisis in a number of countries, notably Germany. Both services and industrial companies reported a recent improvement in new business. Consumer confidence was buoyed by improved optimism over the recent economic situation and outlook,” said Howard Archer from IHS Global Insights.
Most Eurozone members saw improvement in sentiment in May including Italy, Germany, Spain, Greece and others. France however saw a decline as the economic situation there continues to be poor.
Further gains for the Euro are likely to be limited due to increasing speculation that the European Central Bank will introduce new easing measures at next week’s eagerly anticipated policy meeting.
Euro Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.3617 ,
Euro,, Pound Sterling,0.8120 ,
Euro,,Australian Dollar,1.4734 ,
Euro,,Canadian Dollar,1.4776 ,
Pound Sterling,,Euro,1.2314 ,
US Dollar,,Euro,0.7344 ,
[/table]
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