The Euro to Pound (EUR/GBP) Exchange Rate softened on Tuesday as positive mortgage lending data out of the UK offered support to Sterling, against the US Dollar (USD) the single currency was hovering around an eight-month low.
The EUR/GBP exchange rate was trading in the region of 0.791; the EUR/USD exchange rate was trading in the region of 1.343.
According to the Bank of England (BoE) the number of mortgage approvals in the UK increased to 67,196 in June, up from the 62,007 recorded in May.
The increase was the first recorded since January and was higher than the 62,600 increase expected by economists.
In the preceding four months approvals fell as the BoE introduced tougher checks on potential borrowers.
The BoE will be hoping for a cool down in the housing market as it previously highlighted the market as the biggest threat to the UK’s economic recovery. The bank’s new and stricter measures for loans have eased demand in the property market and record high prices are thought to be stretching affordability.
Increased speculation that the BoE could raise interest rates before the end of the year is also causing potential buyers to take a wait and see approach to purchasing property.
The Euro came under pressure on Tuesday after retail sales data out of Spain increased concerns that the nation already witnessing sky high unemployment, stagnating wages and tax increases is seeing it’s hoped for recovery slip away.
Retail sales growth in the struggling nation dropped for a second consecutive month in June. Month-on-month sales declined by 0.7%, in contrast to May’s rise of 1%. Year-on-year sales grew by just 0.2%, slower than the 0.5% seen in May and below the 0.46% growth expected by economists.
The Euro remains under heavy selling pressure due to concerns over the divergence in monetary policy of the European Central Bank and its major peers and as worries over the region’s economy continue.
Also putting pressure upon the single currency are market concerns over the EU imposing new sanctions against Russia. Economists are worried that the sanctions could have a knock on negative effect on the Eurozone and global economy.
Investors will now turn their attention to Thursday when the latest Eurozone consumer price data is released. Concerns over low inflation will likely not be eased. On Wednesday a wealth of data is due for release including Spanish GDP data, German inflation and Eurozone sentiment reports.
The EUR/USD exchange rate is likely to fall further later in the week as economists expect the latest data out of the world’s largest economy to show that it is strengthening broadly. Positive data will likely increase speculation that the Federal Reserve will have to raise interest rates sooner than forecast and that will put further pressure upon the Euro.
Euro Exchange Rate News:
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3438 ,
Euro,,British Pound,0.7906 ,
Euro,,Australian Dollar,1.4293 ,
Euro,,Canadian Dollar,1.4514 ,