The Euro was trading at its lowest level in 19-months against the Pound on Friday after the UK currency was boosted by comments made by Bank of England governor Mark Carney and as data showed that the Eurozone’s trade balance rose less than forecast.
The Euro was already under pressure against the Pound due to last week’s action by the European Central Bank to cut interest rates.
The decision saw investors turn to higher yielding assets as they went on the hunt for better returns for their funds. The decision to cut interest rates also highlights the diverging policies of the Eurozone and the UK.
The Pound then surged after investors increased their bets that the Bank of England will introduce an interest rate rise before the end of this year.
“There’s already great speculation about the exact timing of the first rate hike and this decision is becoming more balanced. It could happen sooner than markets currently expect,” said Mark Carney at a gathering at the Mansion House in the City of London yesterday.
The single currency came under further pressure as the morning wore on after data released by Eurostat showed that the Eurozone’s trade balance rose less-than-forecast in the first quarter of 2014.
Eurostat said that Euro zone trade balance rose to €15.8 billion, from €15.4 billion in the preceding quarter whose figure was revised up from €15.2 billion. Economists had expected Euro zone trade balance to rise to €15.9 billion in the first three months of the year.
Against the US Dollar the Euro made gains after the ‘Greenback’ was weakened by the release of lukewarm retail sales data yesterday. The data highlighted the fact that the world’s largest economy is continuing to struggle and that the Federal Reserve is unlikely to introduce an interest rate rise anytime soon.
Euro Exchange Rate News:
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