Homepage » News » EUR/GBP » Euro to Pound (EUR/GBP) Exchange Rate Little-Moved; Euro to US Dollar (EUR/USD) at Eight-Month Low

Euro to Pound (EUR/GBP) Exchange Rate Little-Moved; Euro to US Dollar (EUR/USD) at Eight-Month Low

Euro Symbol

The Euro (EUR) to Pound Sterling (GBP) exchange rate was little moved on Monday as Producer Price Inflation data out of the Eurozone eased concerns over the threat of deflation, the US Dollar (USD) to Pound Sterling exchange rate however remained near an eight-month low.

Earlier in the session the Euro came under pressure after a report showed that sentiment in the single currency region fell sharply this month.

Sentiment dropped on concerns over the impacts of EU imposed sanctions against Russia.

‘After last month’s recovery the Eurozone Sentix index has suffered a painful set-back. As this slump derives from an event which is subject to politics and power play, the central banks, particularly the European Central Bank, will have difficulty in trying to counter this,’ Sentix said in a statement.

According to the Sentix research groups index which tracks morale amongst the regions investors in the Eurozone tumbled from July’s reading of 10.1 to a figure of 2.7 in August, its lowest-level in a year.

After that report the Euro softened slightly against its major peers, it then regained ground to trade steadily against the Pound following the release of UK Construction PMI data which showed an easing in July from the previous month.

According to Markit’s Construction PMI report, construction activity in the UK slowed down from June’s figure of 62.6 to a reading in July of 62.4.

Despite the fall the figure was above economist expectations and showed that the overall pace of growth in the sector increased to its fastest pace since 2007.

The Euro then received some support after a report showed that producer price inflation in the Eurozone increased for the first time in six months in June.

According to Eurostat, its Producer Price Index (PPI) inched higher to a seasonally adjusted figure of 0.1%, beating expectations for an unchanged reading of 0.0%.

The data went some way to ease concerns over the threat of deflation in the Eurozone albeit probably not enough to cause investors to lower their expectations for the European Central Bank to introduce new monetary easing measures at Thursday’s policy meeting.

Year-over-year, the producer price index declined at an annualized rate of 0.8% in June, below forecasts for a drop of 1%. Prices fell at a rate of 1% in May.

Against the US Dollar the Euro was unable to recover ground and held onto its lowest level in eight months. Tomorrow’s US Services and Manufacturing PMI reports are forecast to show growth in those sectors accelerated.

‘The trend in Euro is clearly down, and we think that story’s got further to run. Draghi will maintain his dovish tone for sure, given the inflation data across Europe has been mostly weak,’ said Imre Speizer, market strategist at Westpac Banking Corp.

The Pound could push higher on Tuesday if manufacturing and industrial production data come in positively. Traders will also be focused on GDP data out of Italy and factory orders reports out of Germany.

Euro Exchange Rates

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3424 ,
Euro,,British Pound,0.7979 ,
Euro,,Australian Dollar,1.4400 ,
Euro,,Canadian Dollar,1.4669 ,

As of 11:05 am GMT