Pound / Euro and US Dollar Exchange Rate: The Euro exchange rate posted significant gains yesterday

Foreign Exchange Rates Currency News - The Euro exchange rate posted significant gains yesterdayThe Euro exchange rate strengthened against both the Pound and the US Dollar

by Josh Ferry Woodard

Sterling / Euro and US Dollar exchange rates

Today is Friday the 13th but don’t worry folks, GDP grew by 50% less than expected last year, manufacturing and industrial production faltered in line with a hugely disappointing festive consumer report and on top of that the wounded Eurozone is even making gains against the Pound. Surely we’ve had our fair share of bad luck already?

The Euro exchange rate posted significant gains yesterday afternoon on the back of ECB President Mario Draghi’s speech. The ECB maintained its record low interest rate of 1.0%. Mario Draghi made claims – concurrent to previous reports – that liquidity across the 17-nation bloc has improved since the Long-Term-Refinancing-Operation (LTRO) gave out €489 billion in 3-year low-interest loans. He stated that the banks making large ECB deposits were different to those who took out the loans; this claim looked justified as borrowing costs fell dramatically yesterday in the Eurozone. Spain sold €10 billion of bonds yesterday morning, with 3-year note yields falling from 5.187% to 3.384%, and Italy managed to sell €12 billion of bills, with 1-year bond yields falling by over 50% from 5.952% to 2.735%.

The Euro exchange rate strengthened against both the Pound and the US Dollar following the successful press conference. The Pound was not helped by unsatisfactory Manufacturing Production figures and Sterling was dealt another blow when the National Institute of Economic and Social Research announced that estimated GDP grew by as little as 0.1% in the fourth quarter. This implies that the economy grew by just 1% in 2011, less than 50% of 2010′s 2.1% growth. This stoked fears that Britain could be slipping into contraction.

UK Producer Price Index figures released today showed less growth than expected for both input and output figures thus signalling more bad news for the Pound. The US Dollar declined against most of its rivals in the overnight Asian session due to an improvement in risk appetite following a positive day for the Eurozone. The Euro could post further gains today, as Italian 10-year bonds have dropped below the psychological 7.0% to 6.48% this morning, and EU Trade Balance figures vastly improved from €1.0 billion to €6.9 billion. The current Pound to Euro Exchange rate stands at 1.196; the current Pound to US Dollar exchange rate stands at 1.535; and the current Euro to US Dollar exchange rate stands at 1.285.

Today’s Exchange Rate Data

UK 09:30 – UK Producer Price Index (December)

EU 10:00 – European Monetary Union Trade Balance (November)

US 13:30 – US Import Price Index (December)

US 13:30 – US Trade Balance (November)

US 14:55 – Reuters/Michigan Consumer Sentiment Index (January)

Related posts:

  1. The Euro makes significant gains against the majors ahead of the ECB rate decision and press on conference this Thursday
  2. The Dollar continued to slide yesterday following a significant drop in the sales of new homes
  3. The Dollar makes significant gains against the majors after August nonfarm payrolls is revised up to 188,000
  4. Euro exchange rate today: The pound has maintained its 15-month high against the Euro exchange rate
  5. Daily Foreign Currency Exchange Rate Forecast and News – Sterling made gains against the U.S Dollar yesterday

Article source: http://feedproxy.google.com/~r/ForeignExchangeOutlook/~3/3_IA21ra6-A/

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