Euro to Pound Exchange Rate Ends Week Higher, Euro to USD Gains by 1.4 per cent

A quiet European trading session left the Euro slightly higher against a stagnant Pound.

The British currency experienced minimal movement on Friday due to a lack of UK news, and what local data there was (construction output figures) was less-than-impressive.

The report showed that UK construction output dropped by a seasonally adjusted 2.8 per cent in February month-on-month, considerably more than the 1.3 per cent decline expected.

On the year construction output climbed by 2.8 per cent, less than the 4.4 per cent annual increase forecast.

This figure was disappointing, but economists like Howard Archer still envisage construction output recording overall expansion in the first quarter of the year.

He referenced the construction sectors’ impressive January performance and stated; ‘In fact, any growth in construction output in March would result in some overall expansion in the first quarter, as even flat output in March itself would see output up 0.1 per cent in the first quarter. It needs to be remembered that the implications for overall GDP growth in the first quarter are relatively limited.’

Euro to Pound (EUR/GBP) fluctuations were also limited following the release of final German inflation figures for March.

The inflation data met previously estimated levels, showing a monthly consumer price increase of 0.3 per cent and an annual gain of 1.0 per cent.

Meanwhile, the Euro was poised to post its most significant five-day advance on the US Dollar for six months as the North American currency floundered following the release of dovish FOMC minutes.

Although the Euro hasn’t exactly put on a stellar performance this week, the common currency has been able to take advantage of the ‘Greenback’s weakness and advance.

Over the last week the Euro has strengthened by 1.4 per cent against the US Dollar and on Friday the common currency was within touching distance of the 2 ½ year high achieved in February.

According to Sucden Financial analysts; ‘The Euro continued to find significant support on dips and pushed to fresh three-week highs close to 1.39 during the New York session with the Dollar unable to generate any recovery momentum.’

While it seems increasingly likely that the ECB will have to introduce additional stimulus in order to stave off deflation and boost economic growth in the Eurozone, some industry experts believe that the common currency’s upward trajectory could continue in the near future.

According to an IFA Magazine report, a monthly close of above 1.3950 in the EUR/USD pairing could indicate a further move to 1.4500.

The German ZEW economic sentiment survey and Eurozone inflation figures will be the major European reports to be aware of.

Euro Exchange Rates

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate , 
Euro,,Pound Sterling,0.8293,
Euro,,US Dollar,1.3874,
Euro,,Canadian Dollar,1.5216,
Euro,,Australian Dollar,1.4768,
Euro,,New Zealand Dollar,1.6002,
US Dollar,,Euro ,0.7253,
Pound Sterling,,Euro,1.2063,
Canadian Dollar,,Euro,0.6572,
Australian Dollar,,Euro,0.6774,
New Zealand Dollar,,Euro,0.6258,
[/table]