Euro (EUR) Exchange Rate Trends Lower in Advance of Economic Sentiment Surveys
The Euro (EUR) has continued to trend lower on Tuesday morning ahead of the latest ZEW Economic Sentiment Surveys, with traders prepared to see a decline in confidence across the Eurozone. As a result the Euro to Pound Sterling (EUR/GBP) exchange rate was on a downtrend at 0.7702, while the Euro to US Dollar (EUR/USD) pairing was trending lower around 1.1168.
Dovish Draghi Boosts Pound Euro to US Dollar (EUR/USD) Exchange Rate Today
Unsurprisingly the Euro (EUR) has remained on a dovish trend following the latest comments from European Central Bank (ECB) President Mario Draghi. Reiterating the central bank’s willingness to act Draghi prompted a fresh wave of selling for the single currency, in spite of market doubts over the ECB’s ability to deliver on that promise. Consequently the Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1143 on Monday afternoon.
With global stock markets rallying after the turmoil of last week, a reduction in safe-haven demand has weakened the Euro (EUR) as the outlook of the single currency remains more muted.
Odds of Expanded ECB Easing to Weigh on Euro (EUR) Exchange Rate Today
In spite of fears that the reopening of the Chinese stock markets following the Lunar New Year break could prompt a fresh wave of market volatility, sentiment on Monday morning has proved largely optimistic. With investors back in risk-on mode the Euro (EUR) has lost much of the safe-haven support that had helped to shore it up in the last week. Friday’s disappointing raft of Eurozone GDP figures have continued to weigh on the single currency, as overall growth within the currency union slowed and signs of weakness in the German economy emerged.
Altogether this has encouraged speculation that the European Central Bank (ECB) will opt to introduced further monetary easing measures at its March meeting. Traders will be looking for an indication of such when ECB President Mario Draghi speaks this afternoon, with forecasts for a narrowed Eurozone trade surplus equally expected to increase the odds of additional loosening.
Pound Sterling Currency News: GBP Shored up Today as UK House Prices Accelerate
The Pound (GBP) has remained on somewhat mixed form against the majors today, after the latest Rightmove House Prices report revealed that the housing market had strengthened markedly on the year in February. With house prices rising 7.2% this would seem to suggest that the domestic market is continuing to run hot, which equally offers a measure of reassurance in the strength of the UK economy while indicating that a bubble is still forming within the market. Nevertheless the Euro to Pound Sterling (EUR/GBP) exchange rate is on a downtrend this morning as investors capitalise on present common currency softness.
Later in the week Prime Minister David Cameron will attempt to secure agreement on proposed reforms to the UK’s relationship with the European Union at a summit of EU leaders, an event that is likely to provoke fresh Sterling volatility. Uncertainty over the UK’s future within the union is set to weigh increasingly on the Pound in the coming days, offering a renewed boost to the EUR/GBP pairing.
US Dollar to Euro (USD/EUR) Exchange Rate Strengthens after Stronger Retail Sales Data
Ahead of the weekend the US Dollar (USD) returned to more bullish form as January Advance Retail Sales proved more robust than expected, clocking in at 0.2% rather than 0.1% as consumer demand unexpectedly strengthened. Although the February University of Michigan Confidence Index came in weaker than forecast at 90.7 rather than 92.3 the ‘Greenback’ continued to regain ground against the Euro. Pundits remain divided over the possibility of the Fed raising interest rates again in coming months as higher consumer spending seems to support assertions of a stronger US economy.
With the US markets closed on Monday for President’s Day, the US Dollar is being driven primarily by international data, as an impressive 7% rally on the Nikkei and comments from the Bank of Japan (BoJ) have weakened demand for the Japanese Yen (JPY). While risk appetite has improved on the back of this, the ‘Greenback’ remains in a stronger position against its fellow safe-haven currencies today.
Current EUR, GBP, USD Exchange Rates
At the time of writing, the Euro to Pound Sterling (EUR/GBP) exchange rate was slumped at 0.7718, while the Euro to US Dollar (EUR/USD) pairing was trending lower around 1.1193. Meanwhile, the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending narrowly in the region of 1.4497.