Last week several factors left the Euro languishing at multi-month lows against peers like the Pound and US Dollar.
Not only did the European Central Bank unexpectedly cut the main refinancing rate to a record low 0.25 per cent, but top ratings agency Standard and Poor’s downgraded France, one of the Eurozone’s largest economies.
The Euro plummeted in response, and although the common currency recovered some ground against its British rival after UK trade balance data failed to impress, the common currency begins the week trapped in a bearish relationship with the Pound.
Concerns that this week’s GDP reports will show that growth slowed not only in the 17-nation currency bloc but in Germany and France, its largest economies, are piling pressure on the Euro and industry experts are beginning to temper their enthusiasm regarding the Eurozone’s economic recovery.
The Euro is currently trading against the Pound in the region of 0.8352
Today in a report for The Telegraph Roger Bootle of Capital Economics asserted; ‘the Eurozone faces many years of grinding austerity, continuing catastrophe in the labour market and a period of very low inflation, or even deflation. As debt ratios continue to rise in the peripheral countries, at some stage the financial markets may come to worry again about their ability to stay in the Euro. At that point bond yields will rise, thereby making the fiscal position worse. The crisis of the Euro is a slow burning affair.’
In comparison the UK’s economic recovery seems far more assured, and the Pound has been trouncing the Euro as a result.
This week Eurozone news could weigh on the common currency, although if reports surprise to the upside the Euro could recover ground.
EUR/GBP movement will also be triggered by UK inflation data, domestic employment figures and a retail sales report.
Euro (EUR) Exchange Rates
As of 09:00
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3374 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8352 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4249 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6171 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3998 <