The Euro had a mixed session against the Pound on Friday as positive news that Russia was withdrawing troops from Ukraine’s eastern border was countered by falling retail sales in Germany and an easing in Spain’s inflation rate.
Demand for riskier assets and the Euro increased early in the session after the US military announced that Russian forces have indeed pulled back from Ukraine’s eastern border.
The move eased tensions but concerns over the situation in the country remain high as Ukrainian forces press on with their assault against Pro-Russian Separatists.
As the morning wore on the single currency softened after a report showed that retail sales in Germany fell slightly last month.
The German Federal Statistics Office said that retail sales dropped by 0.9% in April compared to the previous month. Economists had been expecting a rise of 0.3%.
A separate report out of Spain put further pressure onto the Euro as it raised expectations that the European Central Bank will introduce new monetary easing measures at next week’s policy meeting.
The report showed that the consumer price rises slowed in May due to a fall in food and drinks sales.
According to the Spanish National Statistics Institute, Prices in the country increased by just 0.2% in May from a year earlier and was down by 0.4% from the previous month.
Price growth in Spain has not tipped the 1% level for nine months, adding to worries that a deflationary cycle could establish itself in the Eurozone.
The Pound was finding support from a number of data releases which showed that UK house prices continued to rise and that consumer sentiment rose to its best level in nine years.
The British Chamber of Commerce also increased its growth forecasts for this year and next year.
It now expects the UK economy to expand by 3.1% in 2014 and 2.7% in 2015.
The US Dollar meanwhile remains under pressure from yesterday’s disappointing GDP data. The currency could recover some ground if today’s Chicago PMI and Michigan Consumer sentiment data comes in positively.
Next week promises to be a big mover for the Euro as the latest unemployment figures are due on Tuesday and the eagerly anticipated ECB policy meeting will be held on Thursday.
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,1.3619 ,
Euro,,British Pound,0.8129 ,
Euro,,Australian Dollar,1.4635 ,
Euro,,Canadian Dollar,1.4784 ,