Yesterday European Central Bank President Mario Draghi intimated that recent pieces of economic data for the Eurozone are signalling that the currency bloc has passed through the worst of the fiscal storm.
Draghi stated: ‘Confidence indicators have shown some further improvement from low levels and tentatively confirm the expectation of a stabilisation in economic activity.’
However, while this mildly optimistic take on the situation is certainly welcome, the Euro dropped against both the Pound and US Dollar after the ECB opted to hold rates at record lows, and indicated that rates would remain low for the foreseeable future.
The Euro/Pound pairing is currently trading in the region of 0.8741
Over the course of this week several pieces of positive economic news have bolstered the Euro, including reports showing an expansion in the manufacturing sector and an unexpected decline in German joblessness.
But Draghi was keen to reiterate that the currency bloc has not progressed enough to warrant a rate increase.
Following on from last month’s unprecedented forward guidance, Draghi commented: ‘The Governing Council confirms that it expects the key ECB interest rates to remain at present or lower levels for an extended period of time […] Current expectations of rate hikes in money markets are, according to our assessment, unwarranted. Developments have to be significantly better than our current baseline scenario for our outlook for price stability in order for us to change guidance.’
Overnight the Euro rebounded, recouping yesterday’s losses and pushing back above 87 pence per Euro.
The main piece of Euro news to watch out for today is the Eurozone’s producer price index, due out at 10:00 am. However, EUR/GBP movement could also be inspired by UK construction PMI while EUR/USD will be driven by US employment figures.
Euro (EUR) Exchange Rates
As of 08:55
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3215 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8741 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4835 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6762 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3699 >
