The Euro (EUR) saw little movement against the Pound (GBP) and US Dollar (USD) on Friday as traders widely shrugged off data releases out of the Eurozone and UK and chose to focus on data out of the Untied States of America.
Investors have turned their attention to the USA as expectations have grown in recent days that the Federal Reserve will raise interest rates sooner than anticipated and end its monthly bond-buying programme by October.
Because of the speculation, the ‘Greenback’ found solid support and managed to advance to multi-month highs against the commodity based currencies such as the Australian Dollar and South African Rand.
Sterling was little changed against its major peers and managed to hold onto gains against the Euro even as the latest Construction Output data came in below economist expectations.
The data showed that construction output in the UK stagnated at 0% in July, a drop from June’s figure of 1.2%. Economists had been forecasting for a rise of 0.7%.
On an annual basis, output rose 2.6 percent in July, the slowest rate of growth since November and down from June’s three-month high of 5.3 percent.
The data was unable to weaken the Pound as the currency found support from a new opinion poll on Scottish Independence which that support for the no campaign was back in the lead against its rival the yes campaign.
Against the US Dollar, the Euro was able to maintain its position above a 14-month low as data showed that Eurozone industrial production rose strongly in July.
According to Eurostat, industrial production across the 18-member Eurozone increased by 1% on a month on month basis and jumped by 2.2% compared to July 2013.
The increase in output was led by manufacturers of capital goods, which may suggest that investment spending is set to increase, a welcome development after years of caution on the part of Eurozone businesses.
The positive data was unable to see the Euro make gains as investors remained cautious towards the currency after the European Central Bank (ECB) unexpectedly cut interest rates and announced an easing programme.
Also weighing was news that new European Union sanctions went into force against Russia. Concerns that the new sanctions could be met with retaliatory sanctions from Russia increased following the announcement. The Eurozone economy has been adversely affected by earlier sanctions.
Euro Exchange Rate News:
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