The Euro put in a patchy performance during European trading, holding steady against some rivals while weakening against the Pound and US Dollar.
During the European session the Euro consolidated and extended yesterday’s declines against the Pound, with the EUR/GBP pairing touching a three week low.
A lack of particularly influential economic data for the Eurozone did restrict Euro movement slightly today, but the common currency lost some appeal as investors debated the likelihood of the European Central Bank introducing additional stimulus measures when it meets next week.
Yesterday Bundesbank chief Jens Weidmann implied that instating negative interest rates could help restrain the Euro’s exchange rate and the currency broadly softened as a result.
Meanwhile, the US Dollar was bolstered during the North American session as data showed that the US economy expanded at a faster pace than initially forecast in the final quarter of last year.
US GDP expanded at an annualised rate of 2.6 per cent, up from a previous estimate of 2.4 per cent.
While the result was slightly shy of the revision to 2.7 per cent projected, it was still a positive sign that the US economy ended 2013 on a high.
The report prompted this response from one North Carolina-based senior economist; ‘The economy is shaking off the negative impacts from the weather. We’re beginning to see signs that growth is going to gain some traction and strengthen and accelerate as the year progresses.’
Separate figures also showed that fewer initial jobless claims were filed last week. Applications for unemployment benefit dropped from a revised 321,000 to 311,000 in the week ending March 21st.
However, it wasn’t all good news for the US today as pending home sales slumped by 0.8 per cent in February rather than rising the 0.2 per cent forecast. This marked an eighth month of declines and is indicative of ongoing weakness in the US housing sector.
However, some industry experts are arguing that the home sales results seen over the last few months are largely the result of adverse weather conditions.
Tomorrow several factors could be responsible for EUR/USD movement.
While the Eurozone’s economic confidence measure will be of interest to investors, volatility is more likely to be sparked by German inflation data.
If German consumer prices are shown to have slowed (as expected by economists) the Euro’s bearish relationship with the US Dollar may continue.
US personal spending figures and the University of Michigan Confidence index may also take a toll before the weekend.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,New Zealand Dollar,1.5874,