The Euro (EUR) to Pound (GBP) Exchange Rate edged away from Wednesday’s two year low as the UK currency was weighed upon by concerns over data which showed that wage growth in the country was still weak, the data cast some doubt as to whether the Bank of England will choose to raise interest rates by the end of the year.
Despite the recovery from the two-year low the single currency looks set to see further weakness over the coming weeks as data continues to be lacklustre and as economists begin to lose confidence that a recovery seen earlier in the year is still on track.
Data released in Thursday’s session showed that construction output across the 18-member currency bloc fell sharply in June.
Output fell from the 8.05 figure recorded in May to 3.5% in June. The sharp decline adds to the growing number of reports which show that the Eurozone economy is flagging once more.
A survey of international investors compiled by Bloomberg added to the sense of pessimism surrounding the Eurozone economy as it showed that more than one in three surveyed economists now believe that the region’s economy is deteriorating.
77% of those who took part in the survey now believe that deflation as a greater threat to the region.
Data released on Thursday showed that inflation across the Eurozone remained at just 0.1% month on month and 0.5% on an annual basis, well below the target of 2%.
The report shows that the European Central Bank’s measures introduced in May have had little to no impact upon the worryingly low rate and remains in the Bank’s ‘danger zone’.
The data is likely to increase speculation that the ECB could introduce a new quantitative easing programme at its next policy meeting.
The Euro is also likely to experience some softening from the imposition of newer and harsher sanctions by the USA upon Russia.
Euro Exchange Rate News:
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