- Euro exchange rates improve on ECB news – President Draghi lets down spectators
- Pound weak after Autumn Statement date announced – Hammond names November 23rd
- US Dollar slides on Fed concerns – Further Fed speech due tomorrow
The Euro has steadily risen against the US Dollar and the Pound today, having been boosted by a surprisingly lacklustre delivery from European Central Bank (ECB) President Mario Draghi. The ECB interest rate remained at 0% as forecast, but Draghi was reserved overall about future policy measures, which saw the Euro jump briefly due to the prospect of another month without significant monetary easing.
The Pound failed to make much of a recovery today, with the announcement of the Autumn Statement data as November 23rd putting pressure on the UK currency.
The US Dollar was a similarly poor option for investment, having remained soft over the course of trading due to uncertainty about whether the Fed would or should hike the US interest rate in September.
Tomorrow will bring the decline-forecast German trade deficit for July, the UK’s July deficit-reduction-expected trade balance and a speech from Fed official Eric Rosengren.
The UK is also set to publish Construction Output data for July. On the month output is believed to have fallen by -0.5%, less of a slide than the -0.9% drop recorded in June. However, the annual projection of -3.4% is significantly down on June’s year-on-year result of -2.2%.
Surprising results could inspire GBP volatility. Given that many ecostats for July have proven worse than anticipated, it’s possible that the Euro Pound exchange rate could extend gains before the weekend.
(Last updated September 8th, 2016)
The Pound has fluctuated considerably, while the US Dollar has found itself in low demand today due to major uncertainties about whether a Fed rate hike will take place in September.
Euro Exchange Rate News: Dutch Inflation Data Raises Appeal ahead of ECB News
The Euro has made moderate gains against peers today, consisting of advances of 0.2% against the Pound (EUR GBP) and 0.3% against the US Dollar (EUR USD).
Domestic data out of the Eurozone has been limited so far today, with the Netherlands inflation rate for August and Greek unemployment rate for June having a slight positive effect on the common currency.
In the former case, the annual Dutch inflation rate has risen from -0.2% to 0.2%, while Greece has seen a fractional reduction in the unemployment rate from 23.6% to 23.4%.
Other Eurozone data has been less supportive, with negative results for Ireland’s August inflation rate seeing drops into negative ranges.
Pound makes Uncertain Movements while US Dollar Drops Off on Fed Rate Hike Concerns
The Pound has trended in a tight range against the US Dollar (GBP USD) today, while a greater decline of -0.3% has been recorded against the Euro (GBP EUR). Elsewhere, Sterling has generally been in low demand, having fallen heavily against many of its peers.
The last UK domestic data to come out yesterday was the National Institute of Economic and Social Research (NIESR) GDP report, which alarmingly estimated that the UK was still at high risk of entering a recession in 2017.
The US Dollar has been in a severe state of decline across the board, having dropped by -0.4% against the Euro (USD EUR) and a lesser amount against the Pound (USD GBP).
The latest US news has focused once again on the odds of a Fed rate hike taking place in September, with Fed official Jeffrey Lacker hawkishly saying;
‘It looks like the case for a rate increase is going to be strong in September’.
Contrary to this attitude, however, is the Fed’s Beige Book, which has indicated that low wage growth remains a limiting factor on how soon a rate hike can be safely implemented.
Future EUR GBP USD Forecast: ECB Rate Decision Imminent, UK Chancellor to Speak Later
The next major data to watch out for will come from the Eurozone, where the European Central Bank (ECB) will announce its interest rate decision for September. Some have forecast an expansion to quantitative easing. This will be followed by a press conference with ECB President Mario Draghi.
A lesser-impact development will come from the UK, where Chancellor Philip Hammond is scheduled to give evidence to the Lords Economic Affairs Committee over the afternoon.
Current EUR, GBP, USD Exchange Rates
The Euro Pound (EUR GBP) exchange rate was trending in the region of 0.8842 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.1846 today.
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.1287 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.8862 today.
The Pound US Dollar (GBP USD) exchange rate was trending in the region of 1.3370 and the US Dollar Pound (USD GBP) exchange rate was trending in the region of 0.7480 today.