- EUR GBP at 0.89, EUR USD at 1.09 – Minor market meltdown after ECB President’s comments
- GBP remains soft on UK retail sales – Concerns grow about ‘Brexit’ impact
- US Dollar (USD) boosted by Fed commentary – Clinton’s perceived debate victory also offered support
The Euro’s earlier, shaky faring against the Pound and US Dollar has since given way to considerable losses, owing to a brief boost for the single currency and its aftermath. This was the statement from ECB President Mario Draghi that at present, the central bank had not considered extending quantitative easing; the Euro spiked up across the board on the news.
Within moments, however, the Euro started to dive instead, potentially due to investors restraining themselves, or owing to a sudden and massive selloff of the common currency.
Over the day, the Pound has failed to really recover from the earlier retail sales results, while the US Dollar has held most of its gains on the back of earlier Fed and election-induced gains.
(Last updated October 20th, 2016)
The Euro Pound (EUR GBP) exchange rate was able to gain today as investors digested the latest UK retail sales figures. With consumer spending falling short of the mark, the common currency advanced on its broadly softening British peer.
Meanwhile, the Euro US Dollar (EUR USD) exchange rate softened in response to heightened bets of the US Federal Reserve increasing interest rates in December.
Euro Exchange Rate News: EUR GBP, EUR USD Fluctuate Ahead of ECB News
The Euro has been fluctuating across the board today, having recorded a rise of 0.2% against the Pound (EUR GBP), a dip against the US Dollar (EUR USD) and a jump of 0.7% against the South African Rand (EUR ZAR).
Domestic data out of the Eurozone so far has been limited and low impact, with the Spanish trade balance for August seeing a deficit expansion, but the Dutch unemployment rate falling from 5.8% to 5.7%.
Additional Dutch news has seen the October consumer confidence index rise from 8 points to 12.
These reports had little impact on the performance of Euro Pound, US Dollar exchange rates, with investors instead focusing on the upcoming European Central Bank (ECB) interest rate decision.
Currency News: Pound (GBP) Declines while US Dollar (USD) Gains Following Fed Comments
Pound Sterling (GBP) exchange rates have been performing poorly today on account of the latest UK retail sales results.
On the month in September, sales with and without fuel stagnated at 0%, while the pace of consumer spending slowed on the year.
This news comes at a time when the Prime Minister is heading to her first EU summit, where plans for ‘Brexit’ are likely to be discussed with fellow EU leaders.
US Dollar (USD) exchange rates have been largely positive however, thanks to recent comments from Fed policymaker William Dudley.
While central bank officials are usually tight-lipped about future interest rate decisions, Dudley was actually borderline explicit, stating that;
‘If the economy stays on its current trajectory I think…we’ll see an interest rate hike later this year’.
While this did not raise the already high odds of a December interest rate hike taking place, Dudley’s comments nonetheless caused the US Dollar to soar on firming sentiment that last year’s historic Fed decision will be repeated.
Future Euro Pound, US Dollar Exchange Rate Forecast: Will ECB Change Stance on QE?
The next big news to affect Euro Pound, US Dollar exchange rates will be the European Central Bank’s (ECB) interest rate decision.
No change from 0% is expected, therefore the major investor focus is set to fall on the subsequent press conference given by ECB President Mario Draghi.
While the policymaker may well try to keep his comments brief, questions about whether the ECB is planning to taper its quantitative easing program are likely to come up. If Draghi confirms this, the Euro may receive a boost, as it could signify the ECB concluding that the Eurozone is on its way up.
From the US, two more speeches from Dudley are expected before the day is out, while the afternoon will also see the US existing home sales report published.
The last major UK news of the week will concern Confederation of British Industry (CBI) industrial trends in October, which are forecast to shift up from -5 to -4.
Current Interbank Exchange Rates
The Euro Pound (EUR GBP) exchange rate was trending in the region of 0.89 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.11 today.
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.09 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.91 today.
The Pound US Dollar (GBP USD) exchange rate was trending in the region of 1.22 and the US Dollar Pound (USD GBP) exchange rate was trending in the region of 0.81 today.