The Pound was trading higher against the Euro on Tuesday following a weekend that the European Union would rather forget and as ECB President Mario Draghi warned that the Central Bank is seeing signs of a deflationary cycle taking root in the Eurozone.
Victories for anti-European Union parties in the UK, France and Greece weakened the Euro on Monday and now have the regions political leaders scrambling to find a response to the election results.
In France the right-wing National Front won the vote, taking a preliminary 25% of all votes. In the UK the Eurosceptic UKIP party won by 27% and in Greece the far-left Syriza party took the most votes.
The heavy defeat of French President Francois Hollande’s party has led to him urging the EU’s leaders to reform and said that the EU project had become “remote and incomprehensible”.
The regions leaders are due to gather in Brussels tonight to discuss the election results.
Also weighing upon the Euro was yesterday’s comments made by ECB President Mario Draghi.
The Euro to GBP exchange rate is trading around 0.8088.
The Central Bank President said that the Central Bank is ready to act and said that it is weighing up a range of measures to tackle the regions problems.
“What we need to be particularly watchful for at the moment is the potential for a negative spiral to take hold between low inflation, falling inflation expectations and credit, in particular in stressed countries. There is a risk that disinflationary expectations may take hold. We are not resigned to allowing inflation to remain too low for too long,” said Draghi in his address to the new ECB annual conference in Portugal.
As a result of Mr Draghi’s comments the Euro tumbled to a three month low against the US Dollar.
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,1.3654 ,
Euro,,British Pound,0.8090 ,
Euro,,Australian Dollar,1.4743 ,
Euro,,Canadian Dollar,1.4799 ,