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EUR/GBP, EUR/USD Exchange Rates Climb after Eurozone Inflation Edges Higher

Euro (EUR) Exchange Rates Extend Gains ahead of US Payrolls Today

Ahead of this afternoon’s US Non-Farm Payrolls report the Euro (EUR) has continued to trend higher against rivals. As a result the Euro to Pound Sterling (EUR/GBP) exchange rate is making gains around 0.7935, while the Euro to US Dollar (EUR/USD) exchange rate is on an uptrend at 1.1385.

Earlier…

With the US Dollar (USD) still out of favour with markets the Euro (EUR) has been making further gains today, driven higher by a modest improvement in the latest Eurozone Consumer Price Index.

Improved German Data Shores up Euro (EUR) Exchange Rate Today

Germany’s Consumer Price Index improved the appeal of the Euro (EUR) on Wednesday, surprising investors with a strong uptick from 0.0% to 0.3% on the year in March. This bullish result eased fears that the Eurozone’s powerhouse economy might still be struggling under deflationary pressure, boosting demand for the single currency.

The Euro uptrend has continued today, thanks to a particularly sharp jump in German Retail Sales. On the year in February consumer demand grew from -1.2% to 5.4%, suggesting that sentiment and economic conditions in the country have improved. As the latest Eurozone Consumer Price Index also showed a modest improvement in inflationary pressure, rising from -0.2% to -0.1%, the common currency has remained on a stronger footing against rivals.

Pound Sterling to Euro (GBP/EUR) Exchange Rate Sheds Value despite Higher UK GDP

Confidence in Pound Sterling (GBP) is still generally muted on Thursday morning as concerns mount over the future of the UK’s steel industry. This was nevertheless contrasted by an unexpectedly steady GfK Consumer Confidence Survey and the upwards revision of the finalised fourth quarter UK GDP. Clocking in at 2.1% rather than the 1.9% previously estimated, this seemed to suggest that the domestic economy was in a more robust condition at the end of 2015 than initially thought.

As ‘Brexit’ worries are expected to remain a significant drag on the UK economy ahead of the June referendum, however, this stronger growth could well have fizzled out in the first quarter of 2016, reducing the impact of the figure. Ahead of the weekend the Pound could post some gains if March’s Manufacturing PMI demonstrates greater sector expansion, which could offer some much needed reassurance in the strength of the UK’s manufacturing industry at this troubled juncture.

Stronger ADP Employment Change Fails to Boost US Dollar (USD) Exchange Rate

The US Dollar (USD) has remained in a slump in the wake of Fed Chair Janet Yellen’s more dovish commentary on monetary policy, with investors generally disappointed to see the odds of an April interest rate hike retreat. This bearish sentiment overshadowed a somewhat better-than-forecast ADP Employment Change figure, which showed an increase of 200,000. Nevertheless, this would seem to bode well for Friday’s Non-Farm Payrolls report, with stronger jobs growth likely to bolster the ‘Greenback’.

Current EUR, GBP, USD Exchange Rates

At the time of writing, the Euro to Pound Sterling (EUR/GBP) exchange rate was trending higher around 0.7903, while the Euro to US Dollar (EUR/USD) pairing was making gains in the region of 1.1368. Meanwhile, the Pound Sterling to US Dollar (GBP/USD) exchange rate was on an uptrend at 1.4385.