The Euro began trending higher last week after the European Central Bank upwardly revised growth projections for the Eurozone and demonstrated confidence in the currency bloc’s economic recovery by leaving policy unaltered.
A week later and the Euro exchange rate is still enjoying a comparatively bullish relationship with the Pound (GBP).
The common currency is also close to a two-year high against the US Dollar.
While the Pound was able post its most significant advance against the ‘Greenback’ for four weeks on the back of Bank of England interest rate increase speculation, the British asset was little changed against the Euro.
The GBP/EUR pairing softened yesterday despite an unforeseen dip in Eurozone industrial production and the Pound was barely affected by a report showing that UK house price growth eased last month.
The UK RICS House Price Balance index declined from 52 to 45 in February.
A statement published with the figures observed that the growth in property purchasers ‘started to slow down in February, as the surge in interest sparked towards the end of last summer began to level off. While this certainly doesn’t mean an end to the increasing activity we’ve been seeing recently, it does suggest that the pent-up demand generated throughout the downturn is gradually exhausting itself’.
However, the Pound did receive some underlying support from a Reuters poll. The survey of more than 50 economists revealed that industry experts believe the UK will enjoy more rapid economic growth than any other G7 nation as the year progresses, with the nation strengthening back to pre-crisis levels by June 2014.
The poll put a rate increase occurring in the second quarter of 2015 and estimated annual growth of 2.7 per cent this year.
Reuters also quoted economist James Knightly as saying; ‘The story on the UK remains very positive, with business surveys pointing to robust activity, confidence indicators bouncing strongly, credit growth strengthening and asset prices rising.’
Tomorrow considerable EUR/GBP movement can be expected to occur in response to German inflation figures and UK trade balance data.
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,1.3953 ,
Euro,,British Pound,0.8362 ,
Euro,,Australian Dollar,1.5405,
Euro,,New Zealand Dollar,1.6271,
Euro,,Canadian Dollar,1.5441,
[/table]
