GBP EUR Exchange Rate Outperforms Despite EZ Consumer Confidence Data

Published: Tuesday, 23 April 2013 09:00 BST - Written by Toni Johnson

STORY LINK GBP EUR Exchange Rate Outperforms Despite EZ Consumer Confidence Data

Yesterday’s session in the currency markets brought a relatively light schedule of data releases, perhaps the most significant of which came from the eurozone in the form of the latest consumer confidence survey. Analysts had been anticipating a deterioration of the levels of optimism amongst economic participants in the region, so it came as a pleasant surprise for investors holding euro-denominated assets when the gauge of confidence showed an improvement from March’s level of -23.5 to -22.3 this month.

The development from Europe wasn’t enough to stop the single currency weakening against Sterling, sending the Pound to euro exchange rate (currency : GBP EUR) up to as high as 1.1704 just after the UK equities session closing bell.

Elsewhere, the Pound to US Dollar exchange rate (currency : GBP USD) made moderate gains on the session, tipping the scales slightly above 1.5280 late in the day, having opened up in the lower part of the 1.5200-1.5300 range. A disappointing set of March Existing Home Sales figures, which showed a monthly drop off of 0.6% in the level of property transactions in the world’s leading economy, caused the Greenback to give up ground as institutional investors factored-in a higher likelihood that the Fed’s ongoing Quantitative Easing programme will last into 2014. The US property market figure was particularly damaging for the Buck given that economists had been anticipating that it would show a month-on-month increase of some 0.4%.

This morning’s UK Public Finance data for last month is unlikely to be particularly helpful to the Pound, while this evening’s Reserve Bank of New Zealand policy announcement, and in particular the statement which accompanies it, will be closely-watched by investors holding not only New Zealand Dollar-denominated assets, but also the AUD, ZAR & CAD because of the effect which it may have on global appetite for risk.

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