Homepage » News » EUR/GBP » Euro (EUR) Exchange Rate Hits 1-Week High against Pound (EUR/GBP) and US Dollar (EUR/USD) as Investors Await FOMC Minutes

Euro (EUR) Exchange Rate Hits 1-Week High against Pound (EUR/GBP) and US Dollar (EUR/USD) as Investors Await FOMC Minutes

The Euro (EUR) exchange rate advanced to its highest level in a week against the Pound (GBP) and US Dollar (USD) on Wednesday as sentiment towards the ‘Greenback’ weakened ahead of the Federal Reserve’s eagerly anticipated policy statement.

Earlier in the session, the Euro firmed against the Pound after data released in the UK showed that mortgage and business loan approvals fell more than forecast in September, adding to signs that the nation’s economic recovery is slowing down.

According to the Bank of England (BoE) the number of mortgages approved fell to 61,267, the lowest level since July 2013, a decline from the 64,054 seen in August. Economists have been forecasting for the housing market to slow as the BoE took measures to cool down the market after Governor Mark Carney warned earlier in the year that the market is the biggest threat to the UK recovery.

Sterling was pulled lower as a separate report showed that lending to UK businesses fell by £710 million in September. Small and medium sized businesses saw lending approvals decline by £157 million, a drop of 2.2% from the previous year.

Market attention is focused on the conclusion of the two-day long US Federal Reserve policy meeting. Traders shrugged off disappointing French Consumer Confidence and Spanish Retail Sales data.

Consumer Confidence in France, (the Eurozone’s second largest economy) was unchanged at a reading of 85 in October, below economist forecasts for a rise to 86. Spanish retail sales meanwhile declined -1.8% on a month on month basis in September, down from the previously revised figure of a gain of 2.5%.

Sentiment towards the US Dollar was weaker as data released on Tuesday showed that orders for Durable Goods declined unexpectedly.

The negative data caused investors to raise their bets that the Fed would refrain from raising interest rates until the latter half of next year.

‘The Fed will want to be flexible because low inflation allows central banks not to be in a rush to raise interest rates. That is not something that will hurt the US Dollar. But if the Fed lets the market think more quantitative easing is possible that will be Dollar negative,’ said Roberto Mialich, senior currency strategist at UniCredit Bank AG in Milan.

Euro Exchange Rate Outlook

Thursday promises to be a busy day for the Euro due to a number of major data releases being due for publication.

Economists will closely watch out for the latest German unemployment, Spanish GDP growth and Eurozone sentiment reports.

Disappointing figures from those and we can expect the Euro again go back onto the retreat.

Euro Exchange Rate News:

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.2761 ,
Euro,,British Pound,0.7903 ,
Euro,,Australian Dollar,1.4345 ,
Euro,,Canadian Dollar,1.4217 ,

As of 15:25 pm GMT