Although the Euro was able to advance on its US counterpart after a report revealed that the Eurozone’s manufacturing sector expanded for a fourth month in October, the common currency largely retained declines against the Pound as Sterling broadly strengthened in the aftermath of the release of better-than-anticipated UK construction data.
The Euro is currently trading against the British Pound in the region of: 0.8458
In response to the Euro’s movement foreign exchange strategist Neil Mellor observed; ‘You get some slightly stronger data after the Euro has fallen anyway, so it’s natural that people will then question if the ECB will do something this week. The Euro did come off the lows from September so it could be technically oriented as well. We still favour Euro going higher versus the Dollar into the end of the year.’
The European Central Bank will deliver its rate decision this week, and given last week’s less-than-impressive stream of reports for the Eurozone some investors are expecting the central bank to hint at potential additional rate cuts.
However, the Euro did derive some support today from the news that top ratings agency Fitch has positively revised its outlook for Spain, adjusting it from negative to stable on the basis that Spain’s banking overhaul is progressing well.
Fitch asserted that Spain had emerged from its two-year recession faster than anticipated, but did note that the nation’s economy would remain weak for the foreseeable future.
Fitch stated; ‘Medium-term growth prospects are weak, all sectors of the economy remain very indebted and unemployment is exceptionally high.’ The ratings agency forecast that Spain would post growth of 0.5 per cent in 2014, 0.2 per cent less than the Spanish government has forecast.
Spain’s manufacturing PMI also increased in October, with the measure advancing from 50.7 to 50.9, although levels of consumer confidence in the nation did sink from 69.8 to 65.3.
As the week progresses UK services PMI and the Eurozone’s producer price index could inspire additional EUR/GBP volatility.
Investors will also be looking ahead to this week’s US non-farm payrolls report as a better-than-forecast result could fuel Federal Reserve tapering speculation.
Euro (EUR) Exchange Rates
As of 12:45
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3507 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8459 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4231 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6281 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4046 <