The Euro was little moved against the Pound and is on course to make a second weekly decline as the UK currency remained supported by speculation that the Bank of England will raise interest rates sooner than thought.
Against the US Dollar the Pound was close to its highest level since May 2011 after Bank of England Governor Mark Carney failed to reduce speculation that BoE policy makers will choose to raise interest rates. The currency is on track to make its biggest gain since October against the Dollar.
Initially the Pound softened following the release of the latest mortgage approval data which showed that new approvals hit their highest level since 2007. The number of mortgages approved for house purchases rose to 46,521 from 45,394 in November. Despite that the figure was less than an expected 47,300. The initial softness was reversed as investors chose to widely see the data as positive.
The Euro found some support earlier in the session after data out of Italy showed that retail sales in November edged higher from the previous month. It also remained supported from data released earlier in the week.
The Euro strengthened after a larger than expected increase in Euro zone private sector activity this month indicated that the recovery in the Euro area is strengthening.
On Thursday, Markit said the euro zone’s composite output index rose to a 31-month high of 53.2 in January, up from a final reading of 52.1 in December, as growth picked up in Germany and the rate of decline eased in France.
The session also saw the publication of data out of several other Eurozone nations which all came in weaker than expected suggesting that economists are focusing solely on the positives.
Greece saw its current account deficit widen and industrial production in Belgium came in well below forecasts.
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,1.3723 ,
Euro,,British Pound,0.8269 ,
Euro,,Australian Dollar,1.5830 ,
Euro,,Canadian Dollar,1.5216 ,
[/table]
