As European trading progresses the Euro’s bearish relationship with a broadly bolstered Pound looks set to continue, but the common currency has posted modest gains against safe-haven rivals the US Dollar and Japanese Yen.
The Euro to Pound Sterling Exchange Rate is currently trading in the region of 0.8537 as of 11:55 GMT
The expectation that this week’s manufacturing and services data for Germany/the Eurozone will show that recovery in the currency bloc and its largest economy is gathering momentum helped to support the Euro this morning, allowing the common currency to brush a two-week high against the Yen and a week high against the US Dollar.
Economists have forecast that this week’s manufacturing PMI for the Eurozone will show an advance from 50.3 to 50.6 in August, while services PMI climbed from 49.8 to 50.2 – pushing back above the 50 mark which separates growth from contraction.
German manufacturing PMI, meanwhile, is predicted to have risen from 50.7 to 51, with services PMI experiencing an equally modest advance from 51.3 to 51.6.
As currency strategist Mike Jones noted: ‘We’re seeing some pretty clear signs that the Eurozone has recovered from recession. This week’s European Flash PMI will certainly see that recovery trend shine through.’
However, a surprising result could trigger Euro volatility on Thursday.
The EUR/GBP Exchange Rate hit a low of 0.8495
Over the weekend the Euro largely retained losses recorded against the Pound as a result of last week’s encouraging UK data. The UK’s growth forecast was also raised by the Confederation of British Industry this morning to 1.2 per cent in 2013 and 2.3 per cent the following year, up from previous estimates of 1 and 2 per cent.
As the European session continued the Euro was modestly boosted by the news that the Bundesbank (Germany’s central bank) is expecting German growth rates to return to normal levels in the second half of this year following 0.7 per cent growth in June.
In its most recent monthly report Bundesbank stated that Eurozone members would continue to benefit from the European Central Bank’s record low interest rates.
In relation to the ECB’s forward guidance Bundesbank asserted: ‘This is not an unconditional commitment and does not make a change in the ECB’s monetary policy strategy. The actual key ECB interest rates will continue to depend on the medium-term outlook for inflation, which is based on expectations regarding future developments in the real economy and on credit and money aggregates.’
Although global economic news is a little sparse this week, Euro fluctuations could be inspired by this week’s Eurozone PMI data and German producer price index. Developments in the US and UK GDP figures for the second quarter will also be of interest.
Current Euro (EUR) Exchange Rates
< Lower > Higher
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3369 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8537 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4486 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6366 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7482 <
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1714 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6907 >
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6104 >
(Correct as of 11:55 GMT)
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