The Euro has posted a gain against the Pound for the first time in a week after data out of the UK showed that manufacturing activity in the country increased at a slower pace and as the trade deficit widened.
Demand for Sterling was muted as a result and has dented its chances of making weekly gains against all of its major peers. Against the US Dollar the currency is little changed as the markets await the release of the latest jobs data.
“The direction of the Pound will be data dependent, with the U.S. nonfarm payrolls being a key factor,” said Kathleen Brooks, a research director at Forex.com, a unit of an online currency-trading company “If the U.S. data supports the market view that the Fed is likely to start to taper its bond purchases soon, the Pound may weaken against the Dollar.”
According to the Office for National Statistics, factory output in the UK rose by just 0.2% in July, down from the 2% increase recorded in June. Overall industrial output remained unchanged.
A separate data report showed that the UK’s trade deficit increased to £9.85 billion in July from a shortfall of £8.2 billion recorded in June. Economists had called for a deficit of £8.2 billion.
The Euro meanwhile is beginning to see support from investors leaving riskier emerging markets as the speculation grows over whether the US Federal Reserve will start tapering its easing policy this month. Investors are taking comfort from the region emerging from its longest recession and a sovereign-debt crisis. That’s making the Euro a refuge for traders fleeing emerging-market nations missing out on a global recovery.
Euro (EUR) Exchange Rates
As of 12:40pm
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3135
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8420
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4344
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6519
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3723