The Pound Sterling to Euro exchange rate has plunged during the market open this morning as traders favoured the Euro over the Pound, softer UK data brought the Pound down while the Euro was strong as traders added to speculation that the Euro zone inflation data due for release later this week would not be low enough to spur more monetary easing by the European Central Bank.
The ECB policymakers will meet this Thursday, they want a weaker Euro, that much is clear but what measures they will take they do to provoke the markets.
The Pound also fell back versus the Dollar after data showed British mortgage approvals slowed more than expected in February, could the housing bubble be ready to burst?
Bank of England data showed mortgage approvals numbered 70,309 in February, the lowest since October last year.
Focus will now shift back to the UK purchasing managers' indexes (PMIs) due for release this week, the figure is expected to indicate that Britain's recovery is on a much stronger footing and boost chances of an interest rate hike.
"The Pound could easily start heading back down to the $1.55-1.60 region, most of the positive data has been factored in and bought up, the recent double top concerns us, also the market might start to factor in the Fed raising interest rates on approximately the same time frame as the BOE,” said a senior Forex broker, he added that his advise was now to sell the Pound on any rallies versus a resurgent Dollar.
The Canadian Dollar has bounced back today after a stronger than expected GDP reading, data released earlier today showed the country's economy rebounded at a faster-than-expected pace during January.
Canadian gross domestic product showed growth of 0.5 percent in January, after a decline of 0.5 percent in December, economists have put the fall in GDP down to unusually harsh winter weather.
Key Pound Sterling / Euro / Canadian Dollar Exchange Rates (As of: 17:30 GMT 31/03/2014)
The Pound Sterling to Canadian Dollar exchange rate is trading up +0.12% at 1.84190 GBP/CAD.
The Pound Sterling to Euro exchange rate is trading down -0.03% at 1.21004 GBP/EUR.