Although the Eurozone released several pieces of disappointing data today, including a consumer confidence index which unexpectedly declined, the common currency received support from the news that Portugal’s politicians have been able to hash out a solution for keeping the coalition united.
The common currency experienced extensive fluctuations last week as the news of the resignation of two high-profile Portuguese MP’s rocked markets and saw European stocks plummet.
In order to bring his nation political stability Portuguese Prime Minister Pedro Passos Coelho has proposed that Paulo Portas (the leader of the junior coalition partner who resigned last week) is made vice premier, and so have a greater say in fiscal policy.
As industry expert John Plassard comments: ‘The world looks rosy to investors again, after the US market rallied on much better-than-expected employment numbers that investors finally seem to be interpreting as good news. We have reached a point where markets will reflect the real economy more.’
It also seems that Greece may receive the next instalment of its bailout after the struggling nation met the conditions of its bailout agreement.
However, Greek protesters took to the streets of Athens in order to demonstrate against the public sector reforms Greece’s creditors have asked the nation to undertake.
One news site was quoted as saying: ‘More than 6,000 local administration workers, among them guards and uniformed municipal police on motorbikes, marched to the Administrative Reform Ministry in central Athens, waving black flags, honking horns and sounding sirens. ‘Take your memorandum and get out of here’ the workers chanted, in the first protest since the lenders completed their latest review of Greece’s cost cutting efforts on Sunday, a sign of the resistance the government may face.’
Despite that, the Euro received support from European Central Bank President Mario Draghi’s assertion that ‘euro area economic activity should stabilise and recover over the course of the year, although at a subdued pace’.
On the subject of raising rates, which the central bank has now stated it won’t do for some time to come, Draghi stated: ‘Higher interest rates in a weak economic situation would destabilise a country making the life of your counterparties even more difficult. In the present situation, the way to address potential risks stemming from low rates is to focus on macro-prudential instruments.’
With economic data for the Eurozone thin on the ground tomorrow movement in the GBP/EUR pairing will be driven by news from the UK, including the nation’s manufacturing production figures.
Euro (EUR) Exchange Rates
As of 15:25
The Euro/US Dollar Exchange Rate is currently in the region of: 1.2859 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8616 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4115 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6602 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3569 >