The Euro edged higher against the British Pound on Thursday as investors settled into a holding pattern ahead of policy and rate decision announcements by the Bank of England and European Central Bank.
The ECB is widely forecast to leave monetary policy unchanged after a report released last week showed that the Eurozone’s annual rate of inflation edged higher to 0.7% in April from the record low level of 0.5% recorded in March.
Other positive reports are suggesting that the region’s economic recovery is beginning to broaden. Ireland, Spain and Italy have all seen positive data releases and as usual Germany is leading the pack. France however remains a concern.
The Pound was softer against the Euro as investors expect that the Bank of England’s policy makers will also leave interest rates and its quantitative easing programme unchanged.
Pressure has building upon the central bank as economists expect the BoE to raise interest rates ahead of other major central banks as the UK economy continues to strengthen.
The Euro could come under some pressure due to the situation in Ukraine.
The Euro to Pound exchange rate is trading in the region of 0.8215.
Yesterday the currency ticked higher as demand for riskier assets improved following comments made by Russian President Vladimir Putin.
Signs that Russia has changed its tact over the standoff between the Kiev based Ukrainian government and pro-Russian rebels eased concerns over an escalation in violence.
That changed however after NATO disputed claims by Putin that the 40,000 Russian troops massed on the Ukrainian border had withdrawn.
“We haven’t seen any indications that they’re pulling back their troops. If there’s visible evidence I will be the first to welcome it,” said NATO’s Secretary General Anders Fogh Rasmussen.
The BOE and ECB policy decisions are due at 12:00pm and 12:45pm GMT respectively.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3936 ,
Euro,,British Pound,0.8215 ,
Euro,,Australian Dollar,1.4848 ,
Euro,,Canadian Dollar,1.5166 ,