The Euro has weakened for a third day against the Pound and is on course to make its biggest weekly loss against the UK currency since September as speculation rises that the ECB will consider cutting interest rates to aid the regions faltering economy.
The Pound was bolstered earlier in the session after data showed that manufacturing output expanded for a seventh consecutive month in October albeit slightly lower than forecast. According to Markit economics manufacturing PMI output fell slightly to 56 from the 56.3 recorded in September. A figure above 50 indicates expansion, whilst below marks a contraction.
“The data is good, it’s a robust number. You’ve got the ECB which is potentially going to cut rates, making policy more expansionary, and in the UK that’s not being done. Activity data seems to be improving and that’s good for the Pound” said a senior currency strategist at Commerzbank.
The Euro meanwhile remains broadly weaker against most of its peers following yesterday’s disappointing inflation data out of the region and as unemployment in Italy hit a new record high. The news that Greece was downgraded to an emerging market economy by one of the world’s major credit ratings agency’s also knocked confidence in the regions so called ‘recovery’.
Following the data’s release investors increased their bets that the ECB may cut interest rates as soon as next week.
“Markets are re-calibrating their assumptions for what the ECB may do in the near future after those fairly shocking inflation numbers yesterday. We’ve seen what had been a fairly long Euro position being pared. Markets might be getting themselves a little too bulled up on the expectation of action from the ECB as early as next week,” said Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce.
Euro (EUR) Exchange Rates
As of 11:15 am GMT
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3525
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8456
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4291
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6377
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4093
The Euro/ Japanese Yen Rate Exchange Rate is currently in the region of: 132.9442
The Euro/Swiss Franc Exchange Rate is currently in the region of: 1.2305
The Pound Sterling/ Euro Exchange Rate is currently in the region of: 1.1825
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7393
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6997
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6106
The Canadian Dollar/Euro Exchange Rate is currently in the region of: 0.7095
Swiss Franc/Euro Exchange Rate is currently in the region of: 0.8126
