The Pound to Euro exchange rate (GBP/EUR) eased away from yesterday’s one-year high of 1.22 on Friday following the release of better than expected GDP data out of the Eurozone.
The Euro edged away from the yearly low against Sterling and climbed to its highest level in three-weeks against the US Dollar after Eurostat released its report which bolstered optimism that growth is picking up in the Eurozone.
Optimism was also increased by expectations that European Central Bank President Mario Draghi will have some of the pressure eased on him to take further simulative action.
The Luxembourg based Eurostat said that the Eurozone economy expanded by 0.3% in the last quarter of 2013, beating economist forecasts.
Both France and Germany saw their respective GDP’s rise at similar paces indicating that the Eurozone’s top two economies is narrowing the diverging trend seen last year. The rise was as a result of increased investment and rising exports. The French economy expanded by 0.3% and Germany by 0.4%. The best performing economy was the Netherlands which saw GDP expand by 0.7%.
“The data marked a third successive quarter of expansion following six quarters of contraction through to the first quarter of 2013. It also meant that Eurozone GDP was up 0.5% year-on-year in the fourth quarter of 2013, which was the first annual growth since the fourth quarter of 2011. Nevertheless, Eurozone GDP still contracted by 0.4% overall in 2013. Most Eurozone economies saw an improved performance with the core northern Eurozone economies generally improving,” said Howard Archer, the chief UK and European economist at IHS Global Insight.
The Euro could push higher against the US Dollar later in the session if US industrial production and consumer sentiment reports come in below expectations.
Euro Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.3697 ,
Euro,, Pound,0.8197 ,
Euro,,Australian Dollar,1.5166 ,
Euro,,Canadian Dollar,1.4996 ,
Pound Sterling,,Euro,1.2192 ,
[/table]
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