Published: 11 Nov at 3 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, USA, Germany, India,
With economists speculating that last week’s extensive Euro declines were over the top, the common currency was able to recover some losses against its US peer. The Euro also advanced on the Pound ahead of tomorrow’s German and UK inflation data.
Last week the Euro floundered against the majority of its most traded peers as the European Central Bank introduced an unexpected rate cut, taking the central bank’s main refinancing rate to a record low 0.25 per cent. A surprisingly strong US non-farm payrolls report also kept the Euro under pressure.
However, in spite of the fact that economists have forecast that this week’s Eurozone GDP reports will show that growth slowed in the third quarter, the Euro clawed back losses as emerging market currencies lost their appeal in the wake of the horrific typhoon in the Philippines.
The Euro’s movement inspired this response from currency strategist Jane Foley; ‘People are beginning to think that the Dollar movement at the end of last week was a bit overdone. We’ve had talk about whether maybe they will taper after all in December but I think many people are questioning this.’
But as the week progresses the Euro’s downward trend could resume, particularly if the Federal Reserve officials scheduled to speak this week offer any hints regarding a timeline for tapering easing.
With the Bank of England releasing the UK’s quarterly inflation reports and economic forecasts on Wednesday movement in the EUR/GBP pairing can also be expected.
The Euro is currently trading against the Pound in the region of 0.8392 and trading against the US Dollar in the region of 1.3405
In other currency news, the Indian Rupee slumped to an 8-week low against the US Dollar during the local session.
Bets that last week’s strong US employment report could push the Fed into tapering stimulus before next spring saw the Rupee tumble by 1.2 per cent and brush its lowest level since mid-September.
Some industry experts foresee the Rupee weakening beyond 64 per Dollar in the days ahead.
According to one Singapore based currency strategist; ‘Indian assets are clearly under pressure with the taper theme re-emerging. The spot Rupee might weaken further as the Reserve Bank of India
scales back some of its support measures.’
Tomorrow economic data to look out for includes German CPI, UK CPI and the US Chicago activity index.
As of Monday, 11th November 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1923, GBP USD exchange rate was 1.5986, and GBP INR exchange rate was 101.1753.