The Euro has tumbled to its lowest level in nine days against the Pound after Sterling saw a strong rise after the Bank of England’s quarterly inflation report and press conference with Bank Governor Mark Carney.
Sterling surged after the BoE announced that is expecting the UK economy to expand by 3.4% over 2014, a much faster pace than the previous prediction of a growth rate of 2.8% made last November.
Unemployment is expected to fall below 7% in the first quarter of this year but the Bank ruled out interest rate rises as it revised its forward guidance policy.
Instead of focusing on the UK’s unemployment rate the Bank said that it will now consider a broad range of indicators such as business surveys as well as the unemployment rate. The Bank also added that when interest rates will occur they will only be increased slowly as to not put the UK economic recovery at risk.
The markets are now expecting interest rates to rise in 2015.
Earlier in the session the Euro softened after data showed that industrial production in the Eurozone fell more than economists had forecast. On a monthly basis production fell by-0.7%, worse than the expected figure of -0.3%. On a yearly basis production increased less than expected.
The Euro fell as the data increased concerns over the region’s economic recovery. Eurostat is set to publish its first estimate of Eurozone GDP for the fourth quarter of 2013 on Friday. If that data comes in weaker than forecast then we can expect the Euro to decline further.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3636 ,
Euro,, Pound Sterling,0.8240 ,
Euro,,Canadian Dollar,1.4978 ,
Euro,,Australian Dollar,1.5070 ,
Pound Sterling,,Euro,1.2136 ,