The Euro began local trading slightly softer against the Pound as last week’s less-than-impressive economic data from the Eurozone dampened the common currency’s appeal.
Although the European Central Bank’s opting to leave stimulus unaltered supported the Euro at the tail end of last week, concerning retail sales data for the Eurozone and disappointing factory order figures for Germany kept the currency under pressure.
The Euro extended declines against the Yen and US Dollar as industrial production in France, the Eurozone’s second largest economy, dropped by 0.3 per cent in December following a revised gain of 1.2 per cent in November.
Manufacturing output in the major European nation stagnated.
Although recent PMI reports for France have indicated a modest improvement in the nation’s manufacturing and construction sectors, this data confirms that there are further obstacles to overcome.
In the opinion of forex strategist Steven Englander, ‘The fundamental outlook for the Eurozone remains challenging. The recent Euro resilience need not herald the beginning of the next uptrend in the single currency.’
However, the Euro was later supported by a surprising surge in investor confidence in the currency bloc.
Investors had forecast that the Sentix measure would fall from a reading of 11.9 in January to 10.1 in February, but it actually advanced to 13.3 – a 34 month high.
Meanwhile, the Euro was also supported as encouraging car sales figures for the region indicated an improvement in domestic demand and a firming of the Eurozone’s economic recovery.
Gains against the Euro were slightly limited following the release of a surprisingly upbeat employment confidence report for the UK.
Tomorrow a lack of influential economic news from Europe could limit movement in the EUR/GBP paring, but investors will be looking ahead to Wednesday and the release of the Bank of England’s inflation report as well as Eurozone industrial production figures.
Other Eurozone news to focus on this week includes German CPI, the publication of the ECB’s monthly report and French/German/Eurozone GDP for the fourth quarter.
Euro Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,Pound Sterling,0.8324,
Euro,,US Dollar,1.3646,
Euro,,Canadian Dollar,1.5037,
Euro,,Australian Dollar,1.5268 ,
Euro,,New Zealand Dollar,1.6491 ,
US Dollar,,Euro ,0.7333,
Pound Sterling,,Euro,1.2014,
Canadian Dollar,,Euro,0.6649 ,
Australian Dollar,,Euro,0.6541,
New Zealand Dollar,,Euro,0.6071 ,
[/table]
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