The single currency has made gains against the US Dollar for a second day amid speculation that the Portuguese government is close to agreeing on its budget for 2013 and as Euro finance ministers prepare to hold a conference call on the Greek situation.
The Euro rose against the ‘Greenback’ against the majority of its counterparts before Portugal’s parliament holds a vote on the proposed budget for next year.
“Positive news from the parliaments of Greece and Portugal, that could be supportive for the euro,” said Jane Foley, a senior currency strategist at Rabobank International. “The perception that the Fed could leave policy more accommodating for longer on the back of the rebuild because of the floods is also supportive. If it’s good for risk appetite, you could see it pushing the euro a little bit higher.”
The Euro continues to make gains against its major counterparts due to data showing that Spain’s central government budget deficit narrowed in September and the nation’s GDP shrank by a smaller margin than was predicted. The better-than-expected data is likely to take some pressure off of Spanish Prime Minister Mariano Rajoy to ask for a full sovereign bailout from the European Central Bank.
The Euro could weaken later today after numerous data releases are due this afternoon with many expected to show that the Eurozone has declined in the third quarter. Unemployment across the European Union has increased yet again but this poor figure could be countered by the latest inflation data that shows an easing to 2.5%. The latest data means the Eurozone inflation rate has now run above the ECB’s target of below but close to 2.0PC since December 2010.
As of 11:30 am
The Pound to Euro exchange rate is currently trading at 1.2385
The Pound to US Dollar exchange rate is currently trading at 1.6119
The Pound to Australian Dollar exchange rate is currently trading at 1.5507
The Euro to US Dollar exchange rate is currently trading at 1.3013
The Euro to Pound exchange rate is currently trading at 0.8071
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