Ahead of the release of highly influential German inflation data, the Euro to Pound exchange rate advanced.
The common currency began the local session holding steady against the majority of its most traded counterparts as investors bet that German CPI would show acceleration in price gains. However, the Euro was initially weaker against the Pound as the prospect of upbeat UK growth bolstered the British asset.
The Euro was little-changed after the German GfK consumer confidence gauge held at 8.5 per cent.
However, separate reports showed that French consumer confidence declined and Italian retail sales fell by more than anticipated.
As the day continued the Euro came under pressure as measures of Eurozone economic, industrial and services confidence came in below forecast levels.
The economic confidence index slid from a positively revised 102.5 to 102 rather than advancing to 103 as expected.
Industrial confidence eased from -3.3 to -3.6 while services confidence tumbled from a positively revised 4.5 to 3.5.
The Eurozone business climate indicator slid from 0.4 in March to 0.27 in April.
According to Frankfurt-based economist Christoph Weil; ‘Sentiment is reflecting a deterioration in the global environment. With the crisis in Russia and Ukraine, and the Chinese economy’s slowdown, growth is unlikely to accelerate in the Euro area.’
It wasn’t all bad news however, as the consumer confidence gauge for the 18 nation currency bloc strengthened from -8.7 to -8.6.
Earlier in European trading, UK growth figures showed that the nation’s economy expanded by 0.8 per cent in the first quarter of 2014, slightly less than the growth of 0.9 per cent expected but up from growth of 0.7 per cent in the final quarter of last year.
On the year UK GDP came in at 3.1 per cent in the first quarter.
While the report was a little shy of expectations, Britain is still on schedule to experience the most rapid economic growth of any of the Group of Seven nations.
Each of the major categories which contribute to GDP recorded growth, with the services sector rallying by 0.9 per cent and manufacturing output surging by 1.3 per cent.
Despite this, the Pound still edged lower against the Euro and US Dollar in the aftermath of the report’s release.
The Euro could consolidate and extend gains against its British rival later today if German inflation advanced by 1.4 per cent in April, year-on-year, as economists have forecast.
Euro Exchange Rate Update – 11.00 – 30/04/14
The Euro firmed against the Pound and other peers on Wednesday after weaker than expected inflation data for the Eurozone was released.
Economists expect the rise to 0.8% was enough to prevent the European Central Bank from introducing negative interest rates or quantitative easing. As a result the currency edged away from session lows.
Euro Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,Pound Sterling,0.8252,
Euro,,US Dollar,1.3866,
Euro,,Canadian Dollar,1.5249,
Euro,,Australian Dollar,1.4982,
Euro,,New Zealand Dollar,1.6272,
US Dollar,,Euro ,0.7212,
Pound Sterling,,Euro,1.2114,
Canadian Dollar,,Euro,0.6558,
Australian Dollar,,Euro,0.6675,
New Zealand Dollar,,Euro,0.6143,
[/table]
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