Today's Pound Euro Rate Recovers Losses, Euro to Dollar Negative Bias Continues...

Modified: Tuesday, 5 August 2014 10:06 BST - Written by Ben Hughes

STORY LINK Today's Pound Euro Rate Recovers Losses, Euro to Dollar Negative Bias Continues...

The Euro Pound pairing may have seen some solid gains last week but today we find the Pound to Euro (GBP/EUR) exchange rate reversing that trend to recover losses. The Euro continues its negative trend versus the US Dollar (USD).

Last week Sterling was continuing to be under pressure after domestic data showed that consumer confidence in the UK declined in July and as a separate report showed that house prices grew at the slowest pace since April last year.

Comments made by the Deputy Governor of the Bank of England added to the sense that the Pounds run of gains is coming to an end. Ben Broadbent the BoE deputy governor told Bloomberg News that the “edge is coming off of the UK’s housing market”. He added; “Partly because of what’s happening in the housing market, partly because the global economy is arguably a little softer than one might have hoped, to expect some slowdown over the next year, toward the end of the year into next year, isn’t unreasonable.”

After his comments the Pound weakened for a fourth straight day against the Euro.

“Both the UK housing and consumer confidence data releases were on the weaker side and I would expect further declines for the Pound. The Broadbent comments catalyze the selling process. Investors who were looking to sell on a small blip will go to the market and sell on these comments. For me, it was a warning that rates should not be raised too quickly,” said Neil Jones, head of hedge-fund sales at Mizuho Bank.

Despite edging higher against the Pound the Euro (GBP/EUR) remains under heavy pressure after official data released on Thursday showed that the annual rate of inflation in the Eurozone slowed to a five year low level of 0.4% in July from the 0.5% figure recorded in June.

The report adds to the pressure building on the European Central Bank to take further action in order to implement further stimulus measures in order to encourage growth and fend off the threat of deflation in the single currency region.

A separate report offered a brief reprieve after it showed that the unemployment rate across the Euro area fell to 11.5% in June from 11.6% last month. It was the lowest rate since September 2012.


The Euro found additional support on Friday after the latest Manufacturing PMI data out of Germany, Greece and the wider Eurozone came in positively.

The PMI for the Eurozone came in at 51.8, unchanged from the previous and was slightly below economist expectations for a tick higher to 51.9. Germany saw a rise to 52.4, again short of forecasts for a figure of 52.9 but an improvement on the previous month. Greece surprised on the upside as manufacturing returned to growth after surging to 58.7 from 49.4.

France once again disappointed after it manufacturing sector contracted yet again in July. The PMI fell from 48.2 to 47.8. The fall was less than forecast.

Chris Williamson, Chief Economist at Markit said: “The final manufacturing PMI for the euro area for July came in slightly below the flash estimate, most likely reflecting growing concerns following the escalation of the crisis in Ukraine towards the end of the month. Output and orders are growing at lacklustre rates compared to earlier in the year, meaning firms remain reluctant to take on more staff. The weakness of demand in turn meant companies were generally unable to raise prices for their goods without fear of losing sales.

Any figure above 50 in a PMI report indicates expansion whilst a number below indicates a contraction.

The Pound Sterling (GBP) came under further pressure against most of its peers on Friday as the latest UK Manufacturing PMI came in below expectations. In July activity in the sector eased from 57.5 to 55.4.

EUR/USD Update 04/08/2014

The Euro was holding steady at an eight-month low against the US Dollar on Monday after the ‘Greenback’ recovered from weakness last Friday. The American currency turned broadly lower after data showed that the world’s largest economy saw its unemployment rate tick higher unexpectedly last month.

The latest EUR exchange rates today (sending money from Europe to other worldwide destinations):

The Euro to Australian Dollar exchange rate is trading down -0.09% at 1.44084 EUR/AUD.
The Euro to Canadian Dollar exchange rate is trading up +0.04% at 1.46734 EUR/CAD.
The Euro to Swiss Franc exchange rate is trading down -0.02% at 1.21652 EUR/CHF.
The Euro to Pound exchange rate is trading up +0% at 0.79810 EUR/GBP.
The Euro to New Zealand Dollar exchange rate is trading down -0.07% at 1.57691 EUR/NZD.
The Euro to Lira exchange rate is trading down -0.04% at 2.86229 EUR/TRY.
The Euro to US Dollar exchange rate is trading down -0.01% at 1.34267 EUR/USD.
The Euro to Rand exchange rate is trading down -0.04% at 14.32063 EUR/ZAR.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Daily Currency Updates Dollar Pound Forecasts Euro Forecasts Euro P Forecasts