Despite a lack of pertinent economic news for the Eurozone, and Vodafone issuing a warning regarding the fiscal weakness in Southern Europe, the common currency was able to advance on two of its most traded peers this morning, the US Dollar and British Pound.
The Euro Exchange Rate was in the region of 0.8489 against the British Pound as of 11:10 am GMT
The European currency strengthened against the safe-haven ‘Greenback’ as the local session began and the US Dollar modestly weakened ahead of Fed Chairman Ben Bernanke’s economic testimony.
Expectations that the Federal Reserve may maintain its current level of quantitative easing in spite of recent positive US data have caused the ‘Greenback’ to soften against the majority if its peers this week. But if Ben Bernanke, or the policy minutes from the most recent Federal Reserve meeting, hint at easing being tapered in the months ahead the American currency could turn bullish once more.
Meanwhile, the Euro was able to advance on the British Pound following the publication of UK consumer inflation data.
The report showed that in April UK inflation slowed to 2.4 per cent from a year earlier, more than economists had forecast.
Following the data’s publication the Euro rallied to 0.8484 against the Pound and currency strategist Peter Frank commented: ‘This is a negative for Sterling because quite clearly weaker inflation opens the door for more monetary stimulus. It’s not a huge undershoot but it’s a fairly weak number before tomorrow’s crucial [Bank of England policy meeting] minutes. It cements investor decision-making to sell Sterling.’
The Euro was little affected by Vodafone’s declaration that ‘severe macroeconomic weakness’ across Southern Europe (particularly a slump in demand in Spain, Italy, Greece and Portugal) has been ‘very challenging’ and has hit the company hard.
According to Vodafone, their revenue in Southern Europe is down by 16.7 per cent, largely as a result of the current financial climate.
Although news from the US will be a major cause of market volatility in the days ahead, investors will also be looking to manufacturing and services Purchasing Manager Indexes for the Eurozone and Germany, due for release on Thursday. Eurozone consumer confidence data, also out on Thursday, could also inspire movement.
Current Euro (EUR) Exchange Rates
< Lower > Higher – Little Changed
The Euro/US Dollar Exchange Rate is currently in the region of: 1.2883 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8489 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3151 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.5769 >
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7762 <
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1786 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7611 <
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6354 >
(Correct as of 11:10 GMT)
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