After a quiet trading session yesterday the Euro was primed for volatility today as economic sentiment surveys for the Eurozone and Germany were published.
Although growth reports for the currency bloc and its largest economy came in above expected levels at the close of last week, it appears that confidence is still wavering.
Economists had expected the German sentiment measure to slide from 61.7 in January to 61.5 in February but it actually plunged to 55.7.
Similarly, the Eurozone’s economic sentiment index dipped from 73.3 to 68.5 this month.
However, it wasn’t all bad news as a measure of the current situation in Germany advanced from 41.2 to 50.0 – much stronger than the increase to 44.0 expected.
The news was disappointing and marked a second month of declining sentiment in Germany, although economist Thilo Heidrich commented that he won’t be putting too much stock in the result as ‘It’s more of a stabilisation than a turn in sentiment. We’re at very high levels, the highest we’ve seen since the financial crisis.’
The Euro remained stronger against the Pound and US Dollar as investors considered the results.
The Euro was also moderately supported by yesterday’s Bundesbank monthly report. The German central bank asserted that Germany’s economic recovery should have kicked up a gear as 2013 came to an end and 2014 got underway.
A report published earlier today also showed that European new car sales increased for a fifth month in January, with registrations climbing by 5.2 per cent in Europe.
The EUR/GBP pairing was also affected by UK inflation figures.
Britain’s consumer price index fell below the Bank of England’s 2 per cent target for the first time in over four years in January despite economists believing the level would remain unchanged.
The data inspired Pound declines in the immediate aftermath of its publication, with Sterling sliding against the Euro and US Dollar.
Tomorrow additional EUR/GBP movement can be expected to occur as a result of UK employment figures and Eurozone construction output data.
Euro Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,Pound Sterling,0.8226,
Euro,,US Dollar,1.3721,
Euro,,Canadian Dollar,1.5028,
Euro,,Australian Dollar,1.5224 ,
Euro,,New Zealand Dollar,1.6467 ,
US Dollar,,Euro ,0.7293,
Pound Sterling,,Euro,1.2146,
Canadian Dollar,,Euro,0.6654 ,
Australian Dollar,,Euro,0.6567,
New Zealand Dollar,,Euro,0.6060 ,
[/table]
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