The Euro softened against the Pound on Wednesday following the release of data which showed that construction output across the Eurozone contracted year on year in December and came in below forecasts. Mixed jobs data out of the UK weighed upon the Pound.
Construction output in the Eurozone contacted by -0.2% year on year in December but was 0.9% better than the -1.6% figure seen in November.
The Euro found some support from positive news out of Greece. Record spending by tourists in the struggling nation, saw Greece post its first current account surplus since official data began back in 1948. Tourism receipts, the country’s biggest foreign-currency earner, rose 15% to a record 12 billion Euros, while imports shrank.
“For 2014 we expect the current account to stay in surplus as imports will remain weak alongside improving tourism and exports,” said Eurobank economist Platon Monokroussos.
The Pound meanwhile was mixed as according to the Office for National Statistics, the UK unemployment rate increased to 7.2% in the final three months of 2013. The figure took economists by surprise as most had been predicting the rate to remain at 7.1%.
“For every action there must be a reaction and this is it. Overall, the trend is still one of an improving jobs market, but the Bank of England will be keen to emphasise that any further improvements will materialise more slowly than they have in recent months, the closer we get to the long run average of 6.5%. Productivity will increase as more people are put into work and therefore the need for new workers diminishes. We believe that yesterday’s inflation number – the lowest since November 2009 – alongside this jobs figure should be enough to loosen any near term rate hike expectations. We should all still expect to see rate hikes beginning in Q2 of 2015 and no sooner,” said the chief economist at World First.
The jobs data was mixed however and prevented the Pound from declining too much against its peers. The overall claimant count for unemployment benefit fell by 27,600 last month a figure which was better than the decline of 20,000 expected by forecasters. Also restraining losses was data which showed that average earnings ticked by 1.1%, better than the rise of 1% expected.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.3746,
Euro,, Pound Sterling,0.8248,
Euro,,Australian Dollar,1.5206 ,
Euro,,Canadian Dollar,1.5011 ,
[/table]
