Yesterday the GBP to Euro pairing posted its strongest advance for a month. Today the Euro to Pound exchange rate remains moderately lower although movement is a little restrained ahead of tomorrow’s Bank of England rate decision.
This morning the Euro came under pressure as German trade data indicated that the Eurozone’s largest economy is still experiencing some peaks and troughs.
Although German data have been largely on the positive side in recent weeks, today’s trade figures fell short of forecasts.
In February German exports declined by 1.3 per cent month-on-month, a much steeper decline than the drop of 0.5 per cent anticipated.
Imports advanced by 0.4 per cent, more than the gain of 0.1 per cent forecast.
The results imply that external pressures and global economic concerns could be restraining German growth.
The nation recorded an adjusted trade surplus of 15.7 billion Euros, less than the 17 billion Euro estimate.
Germany’s current account balance also fell far short of forecasts, coming in at a surplus of 13.9 billion Euros rather than 18 billion Euros.
According to economist Annalisa Piazza; ‘The outcome is weaker than anticipated and it shows that trade activity remains fragile.’
The appeal of the Euro was also knocked by a report published by the International Monetary Fund.
The IMF asserted that the Eurozone needs more monetary easing if its recovery is to continue.
Meanwhile, the Pound was lifted by the news that the UK’s goods trade deficit narrowed by more-than-forecast in February.
Although exports declined, it was outweighed by the drop in imports and the goods trade deficit eased from 9.463 billion Pounds in January to 9.094 billion Pounds the following month.
Economists had expected a deficit of 9.2 billion Pounds.
While the UK’s economic outlook has brightened this week in the wake of several upbeat domestic economic reports (allowing the Pound to consolidate its position above 1.21 Euros) an absence of major developments has left the GBP/EUR pairing fairly range-bound.
As the European session progresses the Euro may fluctuate in response to ECB official Benoit Coeure’s speech, to be given later today in Washington.
After strengthening against a pressured US Dollar yesterday, the EUR/USD pairing eased lower ahead of the release of minutes from the Federal Open Market Committee policy meeting.
Volatility in the Euro to Pound (EUR/GBP) exchange rate can also be expected to occur tomorrow following the Bank of England’s rate decision.
Euro Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,Pound Sterling,0.8244,
Euro,,US Dollar,1.3788,
Euro,,Canadian Dollar,1.5038,
Euro,,Australian Dollar,1.4702,
Euro,,New Zealand Dollar,1.5856,
US Dollar,,Euro ,0.7253,
Pound Sterling,,Euro,1.2130,
Canadian Dollar,,Euro,0.6630,
Australian Dollar,,Euro,0.6802,
New Zealand Dollar,,Euro,0.6301,
[/table]
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