Euro Money Exchange Rates: UK Trade Data Sends Pound Euro Rate Higher

Modified: Friday, 9 August 2013 14:44 BST - Written by James Fuller

STORY LINK Euro Money Exchange Rates: UK Trade Data Sends Pound Euro Rate Higher

The Pound euro exchange rate has edged higher on the day as investors responded to an encouraging UK data set.

The Pound Euro exchange rate is currently trading up 0.2% at 1.1620 GBP/EUR. The Euro Pound exchange rate is currently trading at 0.8606 EUR/GBP.

This morning’s session brought the release of further positive news regarding the UK economy, this time in the shape of the latest UK trade numbers from the Office of National Statistics. The June import / export numbers significantly bettered analysts’ expectations, showing that the overall British trade deficit has narrowed from May’s reading of £8.7bn down to £8.1bn.

Many analysts have suggested that the Bank of England has actively sought to weaken the Pound since the turn of the year. If this is indeed the UK central bank’s aim, then it appears to be succeeding, at least in part. Just over a year ago the Pound to euro exchange rate was sitting only slightly below the 1.3000 threshold. The intervening period has seen the UK tender slump and during much of this year GBP EUR has been trading at closer to 1.1000 than 1.2000. Judging by today’s British trade numbers, the effect of this bout of Sterling weakness appears to have given UK exporters the boost which they needed.

Elsewhere, last night’s session brought eh release of another set of Chinese data which provides evidence that the economic landscape may be changing in Asia’s premier economy. The July Consumer Price Index inflation numbers for July showed at 2.7% - slightly below the UK’s counterpart number. Last year’s major source of concern for China’s policymakers was that the rate of domestic price rises might spiral out of control, causing social unrest as the nation’s population struggled to cope with the sharp increases in the price of food. The fact that China’s policymakers have so rapidly managed to tame domestic price rises suggests that the recent tightening in policy from the nation’s central bank may be close to achieving its aim. If China does opt to scale back its tightening bias, then expect recent decreases in the nation’s GDP figures to also slow. Such an outcome would have the potential to send the Pound to Australian Dollar (currency : GBP AUD) and Pound to New Zealand Dollar (currency : GBP NZD) exchange rates southwards once again.

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