The Euro was able to advance on the Pound as trading began this morning and a UK house price report failed to show the increase expected by economists.
After the house price gauge came in at 56 per cent, down from the previous month’s 58 per cent and below the 60 per cent expected, the Euro gained on Sterling for the first time in three days.
However, the Euro’s gains against the Pound were limited as the British currency derived underlying support from this week’s positive UK inflation data and the expectation that Friday’s retail sales report will show a rise in purchases.
The Pound could enjoy a period of strength in the months ahead as some industry experts are envisaging that the Bank of England will introduce a rate increase by August of this year, a factor which has not yet been priced into the market.
The Euro remains stronger against the Pound at the moment though and the pairing was little affected by today’s Eurozone data.
Final consumer price index data for the Eurozone and Germany confirmed previous estimates, with consumer prices climbing by 0.3 per cent in the currency bloc in December, month-on-month, and 0.4 per cent in its largest economy.
Meanwhile, the central bank’s monthly report restated the ECB’s commitment to keeping fiscal policy accommodative for as long as proves necessary for stabilising the Eurozone’s recovery.
The ECB governing council asserted that the need to keep policy adjustable is ‘based on an overall subdued outlook for inflation extending into the medium term, given the broad-based weakness of the economy and subdued monetary dynamics.’
On the topic of the currency bloc’s banking union the council stated that it ‘will enhance the quality of information available on the condition of banks and result in the identification and implementation of necessary corrective actions. A timely implementation of further steps to establish a banking union will help to restore confidence in the financial system.’
Today’s US manufacturing and initial jobless claims reports may cause EUR/USD movement. If the reports add to the case for the Fed to continue trimming quantitative easing at a slow but steady pace the Euro could edge lower against its North American counterpart.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,Pound Sterling,0.8328,
Euro,,US Dollar,1.3613 ,
Euro,,Canadian Dollar,1.4880 ,
Euro,,Australian Dollar,1.5492 ,
Euro,,New Zealand Dollar,1.6386 ,
US Dollar,,Euro ,0.7344 ,
Pound Sterling,,Euro,1.2004,
Canadian Dollar,,Euro,0.6721 ,
Australian Dollar,,Euro,0.6455 ,
New Zealand Dollar,,Euro,0.6104 ,
[/table]
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