Foreign Exchange Update : GBP EUR Rate Falls Further as Eurozone PPI Figure Stokes Inflation Expactations
7 Jun 2011 at 6 AM - Written by John Cameron
The Pound Euro exchange rate (GBP EUR) is 1.1198. The Pound Dollar exchange rate (GBP USD) is 1.6355. The Pound Australian Dollar exchange rate (GBP AUD) is 1.5294.
Yesterday saw the Euro’s near-term strengthening continue following higher than expected whole-of-Eurozone Producer Price Index numbers.
The PPI Index, which is considered by analysts to be a leading indicator of inflation, showed that factory input prices across Europe rose by an annualised 6.7% in April, ahead of expectations of a 6.6% increase.
The PPI figure has re-focussed the markets on a likely ECB interest rate hike before the end of the Summer. The possibility of a Eurozone rate hike was heightened by comments made by an official German Government Spokesman, Steffen Seibert, who revealed that German Chancellor Angela Merkel told US President Barack Obama that the Eurozone would ‘master’ its current sovereign debt crisis, when the pair met recently.
However, on a less Euro-positive note, Seibert went on to state that Germany’s contribution to a second Greek bail-out, “must be decided by German authorities," and not by the Eurogroup.
In spite of the Eurozone PPI figure and Germany’s apparent confidence that Europe can contain its current debt situation, expectations for an ECB interest rate rise later this week remain very low, with the futures market going as far as to price the percentage chance of an ECB hike on Thursday at zero.
Elsewhere, the IMF yesterday downgraded its 2011 growth forecast for the UK economy from 1.7% to 1.5%, although it did broadly endorse the UK government’s self-imposed austerity measures.
Further bad news for the beleaguered Pound came in the form of last night’s British Retail Consortium’s UK Retail Sales figures for May, which showed that British same-store shop sales contracted by an annualised 2.1%, further limiting the Bank of England’s scope to raise UK interest rates.
For other live currency exchange rates and a currency converter see the currency news website.
Foreign Exchange Update : GBP EUR Rate Falls Further as Eurozone PPI Figure Stokes Inflation Expactations
Yesterday saw the Euro’s near-term strengthening continue following higher than expected whole-of-Eurozone Producer Price Index numbers.
The PPI Index, which is considered by analysts to be a leading indicator of inflation, showed that factory input prices across Europe rose by an annualised 6.7% in April, ahead of expectations of a 6.6% increase.
The PPI figure has re-focussed the markets on a likely ECB interest rate hike before the end of the Summer. The possibility of a Eurozone rate hike was heightened by comments made by an official German Government Spokesman, Steffen Seibert, who revealed that German Chancellor Angela Merkel told US President Barack Obama that the Eurozone would ‘master’ its current sovereign debt crisis, when the pair met recently.
However, on a less Euro-positive note, Seibert went on to state that Germany’s contribution to a second Greek bail-out, “must be decided by German authorities," and not by the Eurogroup.
In spite of the Eurozone PPI figure and Germany’s apparent confidence that Europe can contain its current debt situation, expectations for an ECB interest rate rise later this week remain very low, with the futures market going as far as to price the percentage chance of an ECB hike on Thursday at zero.
Elsewhere, the IMF yesterday downgraded its 2011 growth forecast for the UK economy from 1.7% to 1.5%, although it did broadly endorse the UK government’s self-imposed austerity measures.
Further bad news for the beleaguered Pound came in the form of last night’s British Retail Consortium’s UK Retail Sales figures for May, which showed that British same-store shop sales contracted by an annualised 2.1%, further limiting the Bank of England’s scope to raise UK interest rates.
For other live currency exchange rates and a currency converter see the currency news website.
TAGS: Daily Currency Updates Euro Forecasts Pound Euro Forecasts Pound Sterling Forecasts
Leave a Comment
Related Stories:
- Australian and New Zealand Dollars Weaken Again As Bank of England Slashes UK Growth Forecast - May 17, 2012
- Pound Euro Exchange Rate Spirals As Greece Heads For Second General Election - May 16, 2012
- Pound Euro Exchange Rate Breaches 1.2500 For First Time Since 2008 As Greek Debt Fears Heighten - May 15, 2012
- Pound Australian Dollar and Pound New Zealand Dollar Rates Could Dip As China Loosens Monetary Policy - May 14, 2012
- Pound Euro Exchange Rate Could Head Higher Following Bank of England Decision to Keep QE On Hold - May 11, 2012
- Pound US Dollar Exchange Rate Recovers Slightly As Greek Anti-Bail-Out Power Bid Fails - May 10, 2012
- Fear Grips Global Markets As Greek Politicians Countenance A Sovereign Debt Default - May 9, 2012
- Sterling Euro Exchange Rate Spirals To 42-Month High As Anti-Austerity Parties Make Gains In Greek Elections And France Elects Pro-Growth President - May 8, 2012
- Sterling Euro Rate Dips As ECB Talks Down Interest Rate Cut - May 4, 2012
Latest News:
- Daily Rate Predictions For The US Dollar, Euro, Pound Sterling and Japanese Yen - May 17, 2012
- Australian and New Zealand Dollars Weaken Again As Bank of England Slashes UK Growth Forecast - May 17, 2012
- Today’s Rate Forecasts For The Pound Sterling, Euro, US Dollar and Australian Dollar - May 16, 2012
- Pound Euro Exchange Rate Spirals As Greece Heads For Second General Election - May 16, 2012
- Exchange Rate Predictions For The Pound Sterling, Euro, US Dollar and Hong Kong Dollar - May 15, 2012
- Pound Euro Exchange Rate Breaches 1.2500 For First Time Since 2008 As Greek Debt Fears Heighten - May 15, 2012
- Currency Exchange Rate Forecasts For The Euro, Pound Sterling, US Dollar and Turkish Lira For Today - May 14, 2012
- Pound Australian Dollar and Pound New Zealand Dollar Rates Could Dip As China Loosens Monetary Policy - May 14, 2012
- Today’s Currency Exchange Rate Predictions For The Euro, Pound Sterling, US Dollar and Arab Emirates Dirham - May 11, 2012
- Pound Euro Exchange Rate Could Head Higher Following Bank of England Decision to Keep QE On Hold - May 11, 2012
Daily Market Updates
Major Currency Forecasts
- Pound Sterling Forecast
- Euro Forecast
- American Dollar Forecast
- Australian Dollar Forecast
- Japanese Yen Forecast
- Swiss Franc Forecast
- New Zealand Dollar Forecast
- Canadian Dollar Forecast
- Norwegian Krone Forecast
- South African Rand Forecast
- Indian Rupee Forecast
- Singapore Dollar Forecast
- UAE Dirhams Forecast
- Turkish Lira Forecast
- Hong Kong Dollar Forecast
Currency Pairs
- Pound Euro Forecast
- Pound Dollar Forecast
- Pound Australian Dollar Forecast
- Pound Yen Forecast
- Pound Swiss Franc Forecast
- Pound NZ Dollar Forecast
- Pound Canadian Dollar Forecast
- Pound Krone Forecast
- Pound Rand Forecast
- Pound Rupee Forecast
- Pound Sing Dollar Forecast
- Pound Dirham Forecast
- Pound Lira Forecast
- Pound HK Dollar Forecast
