Although the news that the European Central Bank’s decision to cut interest rates was not a unanimous one helped the Euro recover some ground overnight, the common currency came under renewed pressure as top ratings agency Standard & Poor’s downgraded France, the Eurozone’s second largest economy.
The Euro is currently trading against the US Dollar in the region of 1.3409
According to S&P’s, slower growth in France will limit the ability of the government to improve the financial position of the general public.
Consequently, the ratings agency cut France’s long-term foreign and local-currency grade from AA+ to AA, with a stable outlook.
Foreign exchange strategist David Forrester said of the decision; ‘For France, the main issue is a lack of economic growth and a lack of reform. The risks to the Euro remain to the downside.’
Although stronger-than-forecast Chinese trade balance data brightened the Eurozone’s export outlook, the Euro was locked in a bearish relationship with peers like the US Dollar and was heading for its most significant two-day slide against the American asset for a year.
But losses were limited by the news that the German trade surplus rose more than anticipated in September as exports increased by 1.7 per cent.
While there are concerns that Germany’s reliance on exports could be wearing on the Eurozone’s economic recovery, news that the surplus widened to 20.4 billion Euros is positive for Germany.
Furthermore, while yesterday’s unexpectedly strong US growth data increased speculation regarding the possibility of the Federal Reserve tapering stimulus sooner than forecast, if today’s US non-farm payrolls report fails to meet estimates the ‘Greenback’ could pare its advance, leaving the Euro free to recover some ground.
Economists have forecast that the US economy added 120,000 positions in October, down from 148,000 positions the previous month. The unemployment rate is expected to rise to 7.3 per cent from 7.2 per cent.
Euro (EUR) Exchange Rates
As of 08:55
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3409 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8335 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4152 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6074 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4002 <
