Although the Euro has recovered some of yesterday’s losses against the Pound, the Euro to GBP pairing is still likely to end the week softer than it began.
The shocking news that the UK’s unemployment rate fell to 6.9 per cent, below the Bank of England’s 7 per cent threshold, saw the Pound soar against its peers and the British currency was clinging to those gains on Thursday despite a lack of additional domestic developments.
While the Euro was able to edge higher against a weakened US Dollar it made little progress against Sterling.
This morning Germany’s producer price index showed that prices were lower than forecast in March.
Producer prices were down 0.3 per cent on the month (stagnation was expected) and dropped 0.9 per cent year on year.
Economists had predicted an annual decline of 0.7 per cent.
As deflationary concerns are weighing heavily on the Eurozone at the moment today’s report could be considered as adding to the case for the European Central Bank introducing additional stimulus measures.
But in the opinion of industry expert Annalisa Piazza the report shows “no inflationary pressures for Germany at the first stages of the price formation chain. Such a picture will translate into a tame inflation scenario also for consumer prices near term and some upswing is expected only for later this year when inflation will be pushed slightly up by better business conditions’.
The Euro was little-changed after the data publication.
While the Easter break begins tomorrow, Italian industrial orders/sales data could have a modest impact on the Euro’s exchange rate.
However, investors will mainly be looking ahead to next week’s influential Eurozone data, including the currency bloc’s consumer confidence figures, German/Eurozone services and manufacturing PMI and the German IFO business climate report.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.3859 ,
Euro,,British Pound,0.8234,
Euro,,Australian Dollar,1.4797,
Euro,,New Zealand Dollar,1.6039,
Euro,,Canadian Dollar,1.5250,
[/table]
