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Money transfer news: Euro exchange rate under pressure
Published: 7 Dec at 12 PM Tags: Pound Sterling, Euro Exchange Rate, Dollar Exchange Rate, Australian Dollar Exchange Rate, Euro Crisis, Rand Exchange Rate, UK, Economy, Inflation, France,
In a week dominated by multiple central bank policy meetings, the pound benefited from the pronouncement by Mario Draghi, President of the European Central Bank (ECB) of a severe downgrading of the growth prospects of the euro zone economy but added that the possibility of a move towards a negative deposit rate had been discussed.
The euro fell to levels not seen since October.
The euro took firm centre stage yesterday with fresh concerns raised about Italy after ex-Prime Minister Silvio Berlusconi's party abstained in a key vote in the Italian parliament, a move that could bring forward elections and increase concerns over the long term stability of Prime Minister’s Mario Monti’s technocrat government.
In Germany, factory orders rose sharply in October, by 3.9% month-on-month led by demand for capital goods from countries outside the euro zone whilst French unemployment rose to 10.3% rate in the third quarter of 2012, well below the forecast of 10.5% raised by most analysts.
In the UK, the Bank of England’s Monetary Policy Committee left both UK interest rates and its asset purchase program, Quantitative Easing (QE) on hold for at least another month. UK interest rates have now been kept at a historic low of 0.5% since March 2009 and the QE program held at £375 billion since July 2012.
Analysts suggested that the desire to maintain the ‘status quo’ has been driven by worries over how stubbornly high UK inflation has been whilst the MPC clearly want to give its new Funding for Lending Scheme a chance to work before ‘tweaking’ policy.
Analysts at Capital Economics suggested that an increase to the QE program was likely "before long" to stimulate the UK economy, particularly in the face of a gloomy Autumn Statement from the Chancellor this week which showed that the austerity drive will now extend to 2018.
Today sees the publication of key unemployment data in the US. Any further improvement in US economic conditions will further bolster sentiment and provide further support to world stock and commodity markets and fuel demand for risk based currencies like the Australian dollar and South African Rand.
The euro fell to levels not seen since October.
The euro took firm centre stage yesterday with fresh concerns raised about Italy after ex-Prime Minister Silvio Berlusconi's party abstained in a key vote in the Italian parliament, a move that could bring forward elections and increase concerns over the long term stability of Prime Minister’s Mario Monti’s technocrat government.
In Germany, factory orders rose sharply in October, by 3.9% month-on-month led by demand for capital goods from countries outside the euro zone whilst French unemployment rose to 10.3% rate in the third quarter of 2012, well below the forecast of 10.5% raised by most analysts.
In the UK, the Bank of England’s Monetary Policy Committee left both UK interest rates and its asset purchase program, Quantitative Easing (QE) on hold for at least another month. UK interest rates have now been kept at a historic low of 0.5% since March 2009 and the QE program held at £375 billion since July 2012.
Analysts suggested that the desire to maintain the ‘status quo’ has been driven by worries over how stubbornly high UK inflation has been whilst the MPC clearly want to give its new Funding for Lending Scheme a chance to work before ‘tweaking’ policy.
Analysts at Capital Economics suggested that an increase to the QE program was likely "before long" to stimulate the UK economy, particularly in the face of a gloomy Autumn Statement from the Chancellor this week which showed that the austerity drive will now extend to 2018.
Today sees the publication of key unemployment data in the US. Any further improvement in US economic conditions will further bolster sentiment and provide further support to world stock and commodity markets and fuel demand for risk based currencies like the Australian dollar and South African Rand.
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Source: moneytransfer.co.uk