Better-than-forecast US employment data might have seen the Pound soften against the US Dollar during the North American session, but the British currency continued to trade strongly against the Euro as investors processed yesterday’s surprising European Central Bank rate decision and France’s credit rating downgrade.
The Pound to Euro Exchange Rate is currently trading in the region of 1.1986 as of 14:55 GMT
Although a report published this morning showed that the UK’s total trade deficit unexpectedly widened in the third quarter, Sterling losses were limited as the week’s more positive UK news and the nation’s brightening economic prospects lent the British asset support.
While UK construction output also defied expectations by declining in September month-on-month, a gauge of UK house prices achieved a record high.
The Euro remained broadly softer in the aftermath of yesterday’s shock move by the ECB to cut the main refinancing rate to a fresh record low, and news that top ratings agency Standard & Poor’s downgraded France from AA+ to AA as a result of ongoing economic concerns piled further pressure on the common currency.
In a statement S&P’s asserted: ‘The French government’s current approach to budgetary and structural reforms to taxation, as well as to product, services, and labour markets, is unlikely to substantially raise France’s medium-term growth prospects.’
However, Euro losses were limited by stronger-than-anticipated German trade balance data.
The GBP/EUR Exchange Rate hit a high of 1.2058
While the Pound has edged away from the nine-month high achieved against the Euro yesterday, it’s still heading for a weekly gain of 1.4 per cent against the common currency – it’s best five-day advance since April.
Today’s UK trade data might have disappointed estimates, but the expectation that the Bank of England may present positively revised growth forecasts for the nation is likely to support the GBP/EUR pairing over the weekend.
As one foreign exchange expert was quoted as saying; ‘The momentum of the economy has built up more rapidly than the Monetary Policy Committee forecast in August [so next week’s reports] will be monitored with serious interest’.
Next week movement in the GBP/EUR pairing could be inspired by German inflation data, UK employment data, German/Eurozone growth data and the publication of the European Central Bank’s monthly report.
Current Euro (EUR) Exchange Rates
< Lower > Higher
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3358 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8347 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4232 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6087 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7482 >
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1986 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7041 <
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6208 >
(Correct as of 14:55 GMT)
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