The Euro climbed to a two-week high against the US Dollar (USD) on Monday and held ground against the Pound (GBP) as investors raised their expectations that tomorrow’s eagerly anticipated preliminary Eurozone inflation report will show that consumer prices increased this month.
The Euro strengthened as expectations rose that the report will show that the inflation rate edged higher to 0.8%.
Last month the annual rate of inflation across the Eurozone slowed to its lowest-level since November 2009 as data showed that inflation slowed to 0.5%, well below the European Central Bank’s target of just under 2%. The weak data piled further pressure upon the ECB to take action to help bolster inflation in the region.
Also supporting the Euro was the release of a better-than-expected consumer confidence report out of Italy. Confidence jumped to its highest-level since 2010 in April suggesting that the new government headed by Matteo Renzi is having a positive impact upon the mood of the nation.
According to statistics institute Istat Italy’s consumer confidence index soared from March’s 101.9 to 105.4 in April. The report showed that households with low debts and savings were far more optimistic than they were previously.
The US Dollar meanwhile softened ahead of Wednesday’s GDP data and Federal Reserve Interest rate decision. Friday’s U.S. nonfarm payrolls report for April is forecast to indicate that the recovery in the nation’s labour market is continuing. This left the Euro to US Dollar exchange rate fluctuating around 1.3866.
Sterling found support from the release recent economic data which has bolstered the outlook for a broadening recovery. Continuingly positive data out of the UK has increased speculation that the Bank of England will increase interest rates sooner than expected. The Pound to Euro exchange rate is currently 1.2146.
Major data for the Pound is due on Tuesday. GDP figures are expected to show that UK economic growth accelerated in the first three-months of the year.
UK GDP data update 29/04/14
Following the release of weaker than forecast UK GDP data the Euro advanced to a two-week high against the Pound and firmed against the US Dollar.
The data showed that the UK economy expanded by 0.8% instead of the 0.9% forecast by economists. Despite that the Euro was restrained in making further gains after a report showed that economic confidence across the 18-member Eurozone fell in April as concerns over the situation in Ukraine and a faltering economic recovery weighed on sentiment.
Against the US Dollar the Euro was little changed as investors awaited the release of US consumer confidence data.
Euro Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.3866 ,
Euro,, Pound Sterling,0.8233 ,
Euro,,Australian Dollar,1.4901 ,
Euro,,Canadian Dollar,1.5280 ,
Pound Sterling,,Euro,1.2146 ,
US Dollar,,Euro,0.7211 ,
[/table]
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