The UK provided Pound Sterling (GBP) a boost on Wednesday, resulting in some solid gains versus the Euro (EUR) and the US Dollar (USD) exchange rates. The British Pound reached a fresh best 2014 rate against the beleaguered single currency, touching 1.2419 at around 18:00 GMT, and is currently valued marginally lower at 1.2411. The UK Jobs Report data release showed that British unemployment hit its lowest level in five years, dropping 0.2 per cent to 6.6 per cent in the first quarter of 2014 compared to the last quarter of 2013.
As we reach Wednesday evening, the live forex exchange rates rates are currently valued :
- The Pound Sterling to Euro exchange rate is trading 0.33 per cent higher at 1.24105 GBP/EUR.
- The Euro to Pound exchange rate is trading down 0.33 per cent at 0.80577 EUR/GBP.
- The Euro to US Dollar exchange rate is trading down 0.08 per cent lower at 1.35285 EUR/USD.
- The Pound Dollar exchange rate is trading 0.25% per cent higher at 1.67895 GBP/USD.
On Wednesday morning the Euro currency (EUR) continues to weaken against the Pound Sterling (GBP) and US Dollar (USD) as the gap between European interest rates and other nation’s interest rates widened after the ECB lowered interest rates last week. “The ECB are hinting at QE, they’ve lowered interest rates, growth is sluggish, we expect further weakening of the Euro over time,” said a senior Forex broker earlier today.
Limited economic reports for the Eurozone left the Euro locked in fairly static trading relationships with its main currency counterparts on Tuesday. That being said, Italy’s final first quarter growth data did confirm that the nation’s economy contracted by 0.1 per cent quarter-on-quarter and 0.5 per cent year-on-year. The UK’s better than forecast annual increase in industrial and manufacturing production also saw the EUR/GBP exchange rate ease lower.
The European Central Bank rate decision was largely factored into the exchange rate, the effect after the announcement was therefore muted. The Euro is proving remarkably resilient to further selling pressure.
The Pound Sterling (GBP) has managed to re-capture an 18-month high versus the Euro exchange rate (EUR), further gains could be likely but markets are still hesitant to buy the Pound before UK jobs, wage and housing data due for release later this week.
“ These recent moves by the ECB are certainly negative for the Euro but it is taking a long time for these factors to reflect in the Euro’s value, we don’t expect anything drastic here, just a slow erosion of the Euro’s value,” said a senior Euro trader today, “we just intend to sell the Euro on any rallies,” he added.
The prospect of the Bank of England raising rates well before its peers in Europe is certainly holding the Pound up against both the Euro and Dollar.
Sterling forecasters are sitting on their hands before the wage and house price figures due for release later this week, any sign of a weaker housing market or lower job creation could translate to a Sterling sell off and lower rates versus the Euro, Dollar, Australian Dollar and Yen.
There are certainly signs of slowing momentum in the housing market; in combination with lower wage inflation these factors could have a negative impact on the UK’s economic expansion.
US Dollar rate gains momentum
The Dollar (USD) has continued to gain after last weeks U.S. jobs report, more jobs have been created than expected, traders prefer the Dollar to the Euro, the market is well bid with strong support for higher U.S. government bond yields compared to those of European counterparts. The Dollar should continue to extend gains versus the Euro into the medium term, there doesn’t seem much advantage to holding the Euro in cash assets, although European equities are likely to gain as the talk of Euro QE grows.
Further exchange rate forecasts are available to read or compare euro rates today to save on currency transfer to Europe requirements.