Euro (EUR) Gains on Widening German Trade Surplus
At the close of last week several factors saw the Euro to US Dollar (EUR/USD) and Euro to Pound Sterling (EUR/GBP) exchange rates advance.
For starters, the common currency was given a boost in the form of better-than-expected German trade data. An unforeseen surge in exports helped the German trade deficit swell in September. Industrial production in the Eurozone’s largest economy also increased by a seasonally adjusted 1.4% in September month-on-month following a revised decline of 3.1% in August.
While this figure was below the 2.0% estimate, the non-seasonally adjusted year-on-year figure of -0.1% beat projections for an annual decline of -0.6%.
This data helped the Euro strengthen against most of its currency counterparts.
The gains in the EUR/GBP exchange rate were aided by the UK’s own disappointing trade balance figures.
Similarly, the EUR/USD exchange rate extended gains after the US was shown to have added fewer-than-forecast positions in October.
As the European session opened on Monday the Euro was holding steady against both the Pound and US Dollar.
EUR/GBP and EUR/USD Strengthen as Confidence Climbs
Later in local trading the Euro to Pound Sterling and Euro to US Dollar pairings consolidated and extended gains as investors responded to the Eurozone’s better-than-forecast Sentix Investor Confidence measure.
The sentiment index rallied from -13.7 to -11.9. It had been expected that the gauge would drift to -13.8.
After the report was published the EUR/GBP exchange rate climbed by 0.1% and the EUR/USD exchange rate gained over 0.3%
James Boston said this of the result; ‘The Sentix report is pointing to some “cautious optimism” for the Eurozone despite the fact that the dangers of recession have not been completely overcome. A rise in longer term optimism among the business community is being cited as the reason that the indicator has posted it’s first moderate improvement since July. Sentix notes that the European Central Bank’s (ECB) announcement last week that it is preparing to further inflate it’s balance sheet has injected some confidence into the market while the an announcement by the Bank of Japan that it will be taking further liquidity enhancing measures has contributed to optimism for a global pick up, the index for the US too is showing long term optimism and this is also assisting the case for a positive global outlook.’
Today’s Euro (EUR) Exchange Rate Forecast
Today is fairly quiet in terms of domestic data, but the Euro (EUR) could experience additional movement as a European Central Bank (ECB) official delivers a speech in Herrenberg, Germany.
The Euro to Pound Sterling (EUR/GBP) exchange rate could also respond to the UK’s Lloyds Employment Confidence Report.
Any further volatility in the Euro to US Dollar (EUR/USD) exchange rate could be due to the US Labour Market Conditions Index and a speech to be given by the Federal Reserve’s Eriv Rosengren.
Later in the week GDP reports for the Eurozone and its largest economies may well have a considerable impact on the Euro (EUR).
US Dollar Rebounds, Gauge of US Labour Market Holds Steady
Before the close of trading on Monday the US Dollar erased its earlier decline against the Euro as the market volatility witnessed at the close of last week was dispelled.
In the opinion of currency expert Collin Crownover; ‘There was a lot to digest Thursday and Friday, with the ECB and the nonfarm payrolls. I was surprised the [US Dollar] sell-off was material, but it looks like we’re bouncing off from that now.’
During the North American session the US published its Labour Market Conditions index, and the measure held steady at 4.0 in October.
Greek Deflation Weighs on Euro (EUR)
The Euro was prevented on capitalising on the improvement in Eurozone investor confidence on Monday as a report showed that Greece fell further into deflation. The nation’s Consumer Price Index came in at -1.7%, down from a previous reading of -0.8%.
The EUR/GBP exchange rate also edged lower on Tuesday as the British Retail Consortium’s Like-for-Like Sales report beat forecasts.
With economic reports for the Eurozone lacking today, movement in both the EUR/GBP and EUR/USD exchange rates will be reliant on global economic developments.
EUR/GBP, EUR/USD Trend Lower after German Data
The Euro softened against both the Pound and US Dollar on Wednesday as investors responded to Germany’s Wholesale Price Index.
The measure declined by -0.6% on the month in October following September’s 0.1% increase.
On the year the German Wholesale Price Index fell by -0.7%, an improvement on the previous month’s annual figure of -0.9%.
Today’s Industrial Production report for the Eurozone could inspire additional Euro movement in the hours ahead, but investors with an interest in the Euro to Pound exchange rate will be paying closer attention to the UK’s jobs figures, due out at 9:30 GMT.
Euro Holds Declines against US Dollar, Advances on Pound
After the pace of industrial production in the Eurozone was shown to have increased by 0.6% on the month in September rather than the 0.7% expected, the Euro consolidated declines against the US Dollar (EUR/USD).
However, the Euro to Pound (EUR/GBP) exchange rate rallied following the release of a dovish inflation report from the Bank of England.
The central bank’s decision to cut inflation and growth forecasts saw investors push back their rate hike expectations to late next year and the Pound fell across the board as a result.
Euro Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,Pound Sterling,0.7860,
Euro,,US Dollar,1.2489,
Euro,,Canadian Dollar,1.4126,
Euro,,Australian Dollar,1.4410,
Euro,,New Zealand Dollar,1.5964,
US Dollar,,Euro ,0.7999,
Pound Sterling,,Euro,1.2721,
Canadian Dollar,,Euro,0.7078,
Australian Dollar,,Euro,0.6951,
New Zealand Dollar,,Euro,0.6259,
[/table]
