Over the last few months the Eurozone has returned to growth after a record long recession and shown some encouraging signs of continuing improvement.
However, officials (including European Central Bank President Mario Draghi) have been attempting to temper enthusiasm by reinforcing that the currency bloc still has a long way to go.
According to Professor Marcel Fratzscher, the President of the German Institute for Economic Research, the recovery will take a long time to bear fruit and the ECB will hold interest rates at record lows for at least two more years in order to encourage growth.
The Euro/Pound pairing is currently trading in the region of 0.8427
In a recent interview Fratzscher stressed that the strength of the German economy would be integral to the Eurozone’s progress.
He also stated; ‘The Eurozone has already hit rock bottom. Especially the debt-stricken countries including Spain and Italy are very likely to reach the lowest point before the end of this year and achieve positive growth next year.’
In Fratzscher’s opinion Greece remains an exception to the overall recovery trend and as the nation’s debt is not sustainable the Greek government will have to work with other EU countries in order to combat the issues.
These comments reflect those made in last week’s surprisingly pessimistic economic statement from Draghi, so investors will be especially interested to see what tone has been adopted in the European Central Bank’s monthly report (due out tomorrow).
This morning data showed that German consumer price inflation remained unchanged in August, holding at 0.0 per cent month-on-month as predicted by economists.
With higher risk assets boosted by an easing in Syria tensions, the Euro was able to advance on the US Dollar overnight.
However, the common currency remained close to a seven-month low against the Pound ahead of the release of UK employment figures. It is expected that today’s reports will show that UK jobless claims declined for a tenth month in August. If this proves accurate the Euro could record further losses against the Pound.
Euro (EUR) Exchange Rates
As of 08:55
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3256 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8427 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4274 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6482 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3717 <