Today sees Pound Euro Foreign Exchange Rate Weaker as Miles Backs up BoE Report

August 14, 2014 - Written by John Cameron

STORY LINK Today sees Pound Euro Foreign Exchange Rate Weaker as Miles Backs up BoE Report

Currency Exchange News UK: Today sees the latest Pound to Euro Foreign Exchange Rate Weaker as Miles Backs up BoE Report - Wednesday’s heavily Sterling-negative Bank of England Quarterly Report was followed up by comments from BoE policy committeeman David Miles today.

The MPC member confirmed that the UK Central Bank was likely to maintain its key interest rate at its current all-time low for ‘a bit longer yet’.

Miles’ words came as a severe blow to the Pound following yesterday’s confirmation from Carney that the BoE’s outlook for the UK economy had deteriorated during the three months since the last Quarterly Report.

The development had caused leading investment bank Societe Generale push out its prediction for the timing of the BoE’s first interest rate hike to the first three months of next year; previously, Soc Gen had seen a tightening of UK policy coming during the final three months of this year.

The French merchant bank went on to observe that analysts had been too Bullish on the Pound for several months, with Kit Juckes asserting that, ‘I don’t know if we’ve misinterpreted him or taken him too literally, but the market has allowed itself to be led a merry dance on rate expectations.’

The upshot of the dual commentaries from the top men at Threadneedle Street sent the Pound euro exchange rate (GBP/EUR) further downwards on the day today, with the pair bottoming out at 1.2439 earlier.

The pair would have tracked much further Southwards were it not for some dismal economic statistics from the euroland, published this morning. Gross Domestic Product data from both the euro area and its premier sovereign state, Germany, served to hold back the single currency on the day.

The worse than anticipated quarter-on-quarter GDP number from the giant Teutonic economy printed at a below expectations -0.2%, while the counterpart whole of eurozone number printed at 0.0%.

The publications will add to the prevailing levels of fear amongst investors holding euro-denominated assets, given their suggestion that the euroland economy may be sliding closer to a potentially damaging bout of deflation.

Euro to USD (EUR/USD) Exchange Rate in Market Dependent on US Figures

The Euro to Dollar exchange rate is trading up in the currency market on Friday residing within the present boundaries of 1.3356 and 1.3376, showing a market movement of 0.10%.

The EUR to USD currency pairing is forecast to fluctuate today following the publication of US Producer Price Index figures, followed by Industrial Production, and the University of Michigan Confidence statistics.

Confidence figures are predicted to reach 82.5 index points, showing consumer confidence has grown in August in comparison to July’s 81.8.

As the Eurozone isn’t scheduled to publish any data, Friday’s market movements for the Euro to US Dollar currency pairing will be reliant on the ‘Buck’s’ strength in the market, and any further development in geopolitical tensions.

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