- Euro fluctuates overall on ECB’s task force plan – Governments set to be more active in monetary policy
- Pound slides as ‘Brexit’-watchers settle in for long-term – ‘Too early’ to see referendum results
- US Dollar softened before Fed rate decision – Less than 25% of rate hike tonight
The Euro has remained fairly static against the Pound and US Dollar during trading today, mainly due to little of note taking place in the Eurozone. The biggest news has been that the European Central Bank (ECB) has set up a task force to consider possible economic reforms that could be put in place by national governments within the Eurozone.
The concept behind this is that with central banks appearing increasingly impotent, the onus may now be on governments to manage their economies in tandem with organisations like the ECB.
The Pound has been in low demand over the course of trading, on account of reports emerging that while positive and negative news has been seen after the June referendum, it is still too early to tell if the overall reaction to the ‘Brexit’ vote has been positive or negative.
The US Dollar has been understandably unable to make any real positive movement today, due to the immense investor uncertainty about this evening’s Fed interest rate decision. As it stands, the odds remain low of any rate movement action this month.
(Last updated September 21st, 2016)
The Pound largely reversed Monday’s gains and flopped against peers on fresh ‘Brexit’ concerns, while the US Dollar remained down on the weekend’s alarming terrorist incidents.
Euro Exchange Rate News: Limited Eurozone Data saw Stable Gains for Single Currency
The Euro was able to climb to 0.86 against the Pound on Tuesday, though against the US Dollar a less impressive rate of 1.11 was seen.
For the most part, Euro gains against these two peers were brought about by concerning developments in both the UK and US, although there were still supportive Eurozone results that facilitated this upwards movement.
Among these were the Dutch consumer confidence printing for September, which rose from 2 points to 8. Additionally, the Greek current account surplus for July climbed from 1.005bn to 1.43bn.
Less helpfully for the Euro’s appeal was the German PPI result for August, which saw an annual and monthly drop in prices.
Pound Sterling Dived on Czech ‘Brexit’ Comments, US Dollar Losses from NYC Bombings Continued Yesterday
The Pound was sent spiralling down against its rivals yesterday afternoon, when concerns about how the UK would negotiate with the EU in ‘Brexit’ talks came to a head.
The catalyst for the Pound’s downfall was Czech official Tomas Prouza, who blasted assumptions that the UK could be able to ‘cherry pick’ favourable terms for its exit from the EU by saying;
‘There is no way whatsoever for the UK to have the cake and eat it at the same time’.
From the US, damaging news came that building permits and housing starts in August had fallen, which compounded that fact that markets were still recovering from the weekend’s apparent terror attacks in New York City. While the suspected culprit was since arrested, the ‘Buck’ failed to spring back on the news.
Future EUR, GBP, USD Forecast: Will Fed Raise US Interest Rates Today? Odds are Low
The biggest news today will come in the evening, when the Federal Reserve will make one of its three remaining interest rate decisions this year.
The US central bank is largely expected to leave rates on hold this month, although there have been two notable dissenters in forecasts – BNP Paribas SA and Barclays. As it stands, the chances of a rate hike are as low as 15%.
The UK will release the nation’s public sector net borrowing result for August this morning; this is expected to result in a large deficit expansion from a 1.47bn surplus to -8.4bn.
The biggest Eurozone news of note will be the European Central Bank (ECB) non-monetary policy meeting, which is not expected to garner as much attention as the usual interest rate decision gatherings.
Current EUR, GBP, USD Exchange Rates
At the time of writing, the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.8615 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.1608.
At the time of writing, the Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.1169 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.8955.
At the time of writing, the Pound US Dollar (GBP USD) exchange rate was trending in the region of 1.2966 and the US Dollar Pound exchange rate was trending in the region of 0.7713.