The Euro has strengthened against the Pound due to the publication of weaker than expected inflation data out of the UK.
Sterling declined against the majority of its most traded peers after data showed that the UK’s inflation rate slowed to 2.4% in April. Economists had been expecting a fall to 2.6%. As a result the Pound tumbled to a six-week low against the US Dollar.
“This is a negative for sterling because quite clearly weaker inflation opens the door for more monetary stimulus,” said Peter Frank, global head of head of currency strategy at Banco Bilbao Vizcaya Argentaria SA, “It’s not a huge undershoot but it’s a fairly weak number before tomorrow’s crucial minutes. It cements investor decision-making to sell sterling.”
The single currency also saw support from Germany’s Central Bank the Bundesbank after it said that it predicts that the Eurozone’s largest economy will grow strongly in the current quarter, raising optimism that a recovery is in sight for the troubled currency region.
It said; “The noticeable increase in industrial orders after a weak start to the year gives hope that with exports and equipment investments, demand factors, on whose stimulus the German economy can generally rely the most will recover”
The Bank also said that European leaders should not relax their deficit targets too much as in their view; it would hurt the credibility of the Eurozone.
The Bank went on to warn that; “However, the poor economic conditions prevailing in many parts of the euro area and the current problems associated with the sovereign debt crisis mean that macroeconomic risks remain high.”
Current Euro (EUR) Exchange Rates
The Euro/US Dollar Exchange Rate is currently in the region of: 1.2863
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8485
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3155
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.5782
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7773
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1781
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7598
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6337
(Correct as of 12:10 pm GMT)