The Pound might be putting in a fairly patchy performance against its major peers, but Sterling was able to advance on a bearish Euro on Wednesday leaving the Euro to Pound exchange rate at 0.8350.
The common currency was put on the back foot yesterday as a measure of German business sentiment declined by more-than-forecast, and Euro losses were extended after European Central Bank President Mario Draghi spoke in Paris.
On Tuesday Germany’s Ifo business climate index fell from 111.3 in February to 110.7 in March. Although the measure of the current situation improved unexpectedly, this report implies that the Eurozone’s largest economy is still fighting economic headwinds.
Shortly afterwards Draghi was quoted as saying; ‘I expect monetary policy to regain influence over the economic cycle, and our accommodative stance to support a gradual closing of the output gap in the coming years. If any downside risks to this scenario appear, we stand ready to take additional monetary policy measures that ensure our mandate is fulfilled. In other words, we will do what is needed to maintain price stability.’
Yesterday Bundesbank chief and ECB official Jens Weidmann intimated that quantitative easing is not out of the question and commented that the central bank could introduce negative interest rates in order to drive down the Euro.
All these factors weighed on the common currency overnight and the Euro held declines as European trading progressed on Wednesday.
The Euro experienced minimal movement following the release of Germany’s GfK consumer confidence survey.
The sentiment index produced a reading of 8.5 for April, unchanged from March and in line with economists’ expectations.
A notable lack of influential UK news may well restrain further Euro to GBP movement as the day continues, but investors will be taking an interest in US durable goods orders and MBA mortgage applications figures.
Tomorrow the UK retail sales report will be the major cause of fluctuations in the pairing.
As UK sales slumped by 1.5 per cent in January, month-on-month, investors will be hoping for a rebound in February.
A month-on-month gain of 0.3 per cent has been forecast and sales are expected to be up 2.4 per cent on the year.
Before the end of the week Eurozone economic confidence data and German inflation figures will be in the spotlight.
Euro (EUR) Exchange Rates
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Currency, ,Currency,Rate ,
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Euro,
Euro,
Euro,
Euro,
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