As the European session opened the Euro was close to a two-year high against the US Dollar and holding steady against the Pound.
While the common currency fluctuated following the release of German sentiment data, the Euro swiftly recovered losses against its North American counterpart ahead of today’s US durable goods orders figures and University of Michigan confidence gauge.
The Pound to Euro Exchange Rate is currently trading in the region of 1.1735 as of 11:40 GMT
However, the Euro did soften slightly against the Pound as positive UK data lifted the British currency.
While Ifo gauges of business climate, current assessment and expectations for German were all expected to either hold at last month’s levels or show improvement in October, they unexpectedly declined.
The German business climate index fell from 107.7 to 107.4 while the current assessment gauge eased from 111.4 to 111.3 and the Ifo expectations measure dipped from 104.2 to 103.6.
This slightly disappointing result follows an unexpected decline in German factory orders and the Bundesbank’s assertion that German growth probably slowed in the third quarter of the year.
As economist Gerd Hassel stated; ‘The German economy is doing alright but I’d expect a setback in the third quarter. Uncertainty continues to be high and that’s why companies have little reason to invest strongly.’
The GBP/EUR Exchange Rate hit a high of 1.1786
However, the Euro quickly returned to trading in the region of a two-year high against the ‘Buck’ after the data was published. According to one Tokyo based forex expert; ‘We’re continuing to see the Dollar get sold. The consensus view is that December tapering is becoming less likely. The Euro is supported as the economic picture there improves and investors seek an alternative to the Dollar.’
But the common currency’s relationship with the Pound was not so bullish, and the Euro posted initial declines against Sterling as the UK GDP report was released.
In the third quarter of the year the British economy expanded by 0.8 per cent, the best quarterly growth for three-years and in line with economists’ expectations.
That being said, Pound movement was limited as some industry experts expected a stronger result. Former Bank of England official Brian Hilliard stated; ‘I’m a little surprised it’s only 0.8 per cent, although it’s a very good number. It does reinforce that the recovery is really taking hold. It should make us a little cautious about the fourth quarter because this is probably the sweet spot in the third quarter. It will rein in expectations a little bit.’
Additional EUR/USD movement is likely to occur in reaction to today’s US data.
Next week the Eurozone reports most likely to impact the EUR/GBP pairing include Monday’s German retail sales, Tuesday’s German GfK consumer confidence survey, Wednesday’s Eurozone consumer confidence data/German consumer price index and Thursday’s Eurozone unemployment and inflation data.
Current Euro (EUR) Exchange Rates
< Lower > Higher
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3795 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8522 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4396 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6652 >
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7235 <
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1735 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6936 <
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6060 <
(Correct as of 11:40 GMT)
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