As the European session began the Euro was supported by the news that the political turmoil which rocked Portugal last week had calmed, and that EU finance ministers had approved the next instalment of Greek aid.
The Euro to Pound Sterling Exchange Rate was in the region of 0.8643 as of 15:55 GMT
The common currency was able to extend gains against the Pound following the publication of some disappointing UK data.
Although economists had forecast that industrial and manufacturing production in the UK would gain in May, industrial production stagnated month-on-month while manufacturing production slid by 0.8 per cent from April.
The Euro to Pound (EUR/GBP) exchange rate hit a high of 0.8696 pence per Euro
The less-than-impressive news saw the Pound drop against the Euro, with Sterling briefly hitting its weakest level since mid-March.
Pound movement prompted one industry expert to comment: ‘The pound’s fallen after the data. We’ve had some fairly robust data recently so for this to be negative is a bit of a punch in the stomach for the Pound. It’s not looking particularly great for Sterling right now.’
The common currency was also able to advance on the US Dollar as the American currency dipped against its higher-risk peers in the wake of boosted risk-appetite ahead of tomorrow’s Federal Reserve-focused speech and policy minutes.
However, Euro gains were limited. This was partly due to a lack of pertinent economic data for the Eurozone, but the International Monetary Fund’s decision to slash its global growth projections also played a part.
The IMF are now forecasting that global growth will stand at 3.1 per cent in 2013 rather than the 3.3 per cent originally forecast in April.
In a statement issued with the decision the IMF cited the following reasons for its growth cut: ‘Downside risks to global growth prospects still dominate [of particular concern is] the possibility of a longer growth slowdown in emerging market economies, especially given risks of lower potential growth, slowing credit, and the possibly tighter financial conditions if the anticipated unwinding of monetary policy stimulus in the US leads to sustained capital flow reversals.’
The IMF growth prediction for the Eurozone was slashed to 0.3 per cent from 0.6 per cent.
Euro movement could be triggered tomorrow by German CPI figures, but news from the US will be the most significant cause of volatility in the currency market.
UPDATE: After Joerg Asmussen, an Executive board member of the European Central Bank, implied that low rates will continue for over a year the Euro dropped to 1.2784 against the US Dollar – a three-month low. The common currency’s flop prompted currency strategist Eric Viloria to comment: ‘It looks like there are some dovish comments from ECB member Asmussen. Draghi reiterated the ECB’s accommodative stance yesterday and easy policy from the bank should keep the Euro under pressure.’
Current Euro (EUR) Exchange Rates
< Lower > Higher – Little Changed
The Euro/US Dollar Exchange Rate is currently in the region of: 1.2838 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8643 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3987 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6336 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7788 <
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1571 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7146 >
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6102 >
(Correct as of 15:55 GMT)
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