With this week’s major European news events, the European Central Bank and Bank of England rate decisions, fast approaching the Euro continued to trade in the region of a three-month low against the Pound.
It is expected that the ECB will opt to hold rates at record lows, continue with its recent trend of offering forward guidance and, according to Bloomberg News Agency, ECB President Mario Draghi will offer a cautious outlook in an attempt to stop investors overestimating the Eurozone’s economic recovery.
The Euro/Pound pairing is currently trading in the region of 0.8437
Although the 17-nation currency bloc has finally returned to growth after a historically long recession the recovery is still fragile and it is expected that Draghi’s growth and inflation forecasts will reflect this.
As stated by economist Alan Clarke; ‘At a time when this recovery is in its early stages, it is important for the ECB president to limit any abrupt upward reaction in yields. Draghi will highlight growing optimism on the growth outlook, although he is likely to maintain a dovish bias on many aspects.’
Prior to the ECB rate decision Euro movement could occur in response to German factory orders data. It is expected that orders declined by 1.0 per cent in July, month-on-month, following a smaller than previously predicted increase of 3.6 per cent in June.
Meanwhile, US employment figures are also likely to impact the EUR/USD pairing. A positive result today would bode well for tomorrow’s more influential US non-farm payrolls report, upping the odds of the Fed tapering stimulus in September.
Euro (EUR) Exchange Rates
As of 08:50
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3171 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8437 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4383 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6731 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3814 <