The Euro strengthened against the Pound on Wednesday after it found support from the release of stronger-than-forecast construction output data and from hopes that a ceasefire could come into effect in Ukraine.
The Construction output data released by Eurostat showed that the regions construction sector recovered strongly in April after it contracted it March. Output rallied by 0.8% in April, recovering from the -0.6% decline seen in the previous month. On a year on year basis construction output surged 8%, up from the previous figure of 5.2%.
The Euro also found support from news that Ukraine’s President Petro Poroshenko has proposed a unilateral ceasefire to allow pro-Russian separatists to lay down their weapons and negotiate a true. The call came as he discussed a solution to the crisis with Russian President Vladimir Putin.
“The peace plan begins with my order for a unilateral ceasefire. Immediately after that we must receive support from the presidential peace plan from all sides involved. This should happen very shortly,” Poroshenko was quoted as saying.
The Pound meanwhile came under pressure against several major peers after today’s Bank of England policy meeting minutes release disappointed economists as they weren’t hawkish enough for their liking.
“The crucial point in the minutes is that the precise timing of a rate rise would depend on the outlook for inflation (which fell last month) and thus wage rises. In short, the Bank of England is unable to forecast our look for rate increases at the moment and, as we have been tub-thumping for a while, this will depend o real wage increases, and with inflation still rising twice as fast as wages there’s still plenty of slack in the system,” said an economist from World First.
Euro to GBP Update – 19/06/2014
The Euro strengthened against the Pound yesterday after the minutes from the Bank of England’s latest policy meeting struck a less hawkish tone than hoped for.
The common currency was also supported by the news that construction output in the Eurozone jumped by 0.8 per cent in April, month-on-month, after declining by 0.6 per cent in March.
Overnight the EUR/GBP pairing held its gains and was trading 0.20 per cent higher.
The EUR/USD exchange rate, meanwhile, surged by 0.40 per cent after the Federal Open Market Committee restated its commitment to leaving interest rates on hold at record lows for some time to come.
A report confirming a 0.5 per cent month-on-month decline in retail sales also pushed the Pound lower against the Euro. Although the dip was expected by economists it was still the first time retail sales had fallen for four months.
A lack of significant economic news for the Eurozone could limit movement in the Euro exchange rate today, though investors will be taking an interest in the US initial retail sales figures.
Euro (EUR) Exchange Rates
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Currency, ,Currency,Rate ,
Euro,,New Zealand Dollar,1.5597,