The Euro to Pound (EUR/GBP) exchange rate weakened to a two-week low and the Euro to US Dollar (EUR/USD) exchange rate firmed as US data disappointed the market ahead of the Thanksgiving Holiday.
Early in the session, the Euro did find some support against a number of peers as economic data out of France showed that consumer confidence increased unexpectedly to reach its highest level in eight-months. The improvement was thought to be because of low inflation, which ironically enough is one of the major factors, which has weakened the single currency in recent weeks.
Also offering support to the single currency was the announcement by the European Commission that it is planning to launch a major investment plan to try to kick-start the Eurozone economy. EC President, Jean-Claude Juncker said that a new €21 billion fund would provide loans for infrastructure projects. He added that he hopes private investment could take the fund up to €315 billion.
Critics are highly doubtful as they see the scheme as far too small to tackle the enormity of the unemployment crisis across Europe.
Constancio Comments Weaken Euro Exchange Rate
As the session progressed, the Euro weakened against the Pound and US Dollar as European Central Bank Vice President Vitor Constancio suggested that the bank would consider introducing quantitative easing in the next quarter if current stimulus measures are insufficient.
‘We expect that the adopted measures will lead, within the time of the program, the balance sheet to go back to the size it had in early 2012. If not, we will have to consider buying other assets, including sovereign bonds in the secondary market, the bulkier and more liquid market of securities available. It would be a pure monetary policy decision, buying accordingly to our capital key, within our mandate and our legal competence,’ said Constancio in a speech.
Following his speech the Euro slipped against the Pound, which had found support from GDP data, which showed that the UK is still on course to outperform many G-7 economies.
US data releases however came in mixed and caused the ‘Greenback’ to slide against several major peers. As the Thanksgiving holidays approach, investors embarked on a round of profit taking which also weighed upon the Dollar.
The Euro then rose to a session high against the US Dollar as the Washington based Labour Department reported that the number of Americans filing for unemployment benefits increased to 313,000, the highest level seen since early September.
The big mover for the Euro on Thursday will be German Unemployment and Eurozone Confidence data.
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,1.2524 ,
Euro,,British Pound,0.7932 ,
Euro,,Canadian Dollar,1.4072 ,
Euro,,Australian Dollar,1.4667 ,