As the European session opened on Tuesday the Pound eased lower against the US Dollar but was little changed against the Euro ahead of the release of UK inflation figures.
However, before the UK data was released at 09:30 GMT the EUR/GBP pairing fluctuated in response to news from Germany, the 17-nation currency bloc’s largest economy.
The Euro is currently trading against the Pound in the region of 0.8392
The Euro experienced modest movement following the release of German inflation data. The report confirmed that the cost of living in Germany rose at the slowest rate since 2010 in October.
On an annual basis the EU harmonised consumer price index rose by 1.2 per cent in October, less than the 1.3 per cent forecast. Month-on-month EU harmonised consumer prices declined by 0.3 per cent rather than the 0.2 per cent forecast.
Non-harmonised CPI for the Eurozone’s largest economy came in at 1.2 per cent, matching a previous estimate and in line with expectations.
Separate reports showed that the German wholesale price index fell by 1.0 per cent in October after rising by 0.7 per cent in September.
In the opinion of some economists this result confirms that the European Central Bank was right to issue an additional rate cut last week.
In other Eurozone news, the Greek government is once again engaged in talks with its international lenders about its bailout package.
Meanwhile, the Bank of France has published revised growth forecasts for the nation. The central bank now envisages that the French economy will grow by 0.4 per cent in the fourth quarter of the year after posting disappointing growth of 0.1 per cent in the previous three months.
Additional EUR/GBP movement is likely to occur following the release of UK inflation data. While the UK’s consumer price index is expected to decline it is believed that it will remain above the Bank of England’s 2 per cent target for yet another month.
According to industry expert Michael Hewson; ‘While concerns about falling prices appear to be raising concerns in Europe, there is no such concern in the UK, with the latest October CPI numbers expected to show a year on year drop from 2.7 per cent to 2.5 per cent.’
Euro (EUR) Exchange Rates
As of 09:00
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3388 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8392 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4359 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6270 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4043 >