Yesterday the Euro surged to multi-week and multi-month highs against several of its major peers as the European Central Bank opted to leave stimulus unaltered.
The common currency pushed its way to a two-month high against the US Dollar and advanced on the Pound as ECB President Mario Draghi positively revised growth forecasts for the Eurozone and downplayed inflation concerns.
In the immediate aftermath of the ECB announcement, market analyst Omer Esiner said this of the decision and the Euro’s subsequent movement; ‘A large part of the market was expecting some form of action from the ECB today, or some indication that monetary easing would be coming in the very near future. We didn’t get either of those things, which is why the Euro is trading higher across the board.’
The Euro was able to extend gains today as another piece of German data surprised to the upside.
German industrial output was shown to have expanded by 0.8 per cent in January, month-on-month, following a positively revised gain of 0.1 per cent.
The Berlin-based Economy Ministry had previously reported a decline of 0.6 per cent.
On the year, output was up 5 per cent in the first month of 2014. Economists had expected an annual gain of 3.4 per cent.
The improvement was aided by a comparatively mild winter.
As the figures were released one Zurich-based economist noted; ‘In the Eurozone as a whole and especially in Germany, the trend is clearly upwards. The data for orders were really strong, indicating a strong performance in the first months of 2014.’
The Pound meanwhile received some underlying support from the Bank of England’s inflation expectation report.
The data showed that expectations for an interest-rate increase in the coming year advanced to an almost two-year high.
Next week Euro volatility could be triggered by Eurozone Sentix investor confidence, German trade balance data, Italian GDP, Eurozone industrial production, German inflation and the publication of the European Central Bank’s monthly report.
Euro Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,Pound Sterling,0.8286,
Euro,,US Dollar,1.3886,
Euro,,Canadian Dollar,1.5266,
Euro,,Australian Dollar,1.5226,
Euro,,New Zealand Dollar,1.6320 ,
US Dollar,,Euro ,0.7201,
Pound Sterling,,Euro,1.2062,
Canadian Dollar,,Euro,0.6552,
Australian Dollar,,Euro,0.6569,
New Zealand Dollar,,Euro,0.6119 ,
[/table]
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