Pound to Euro | Pound Euro Exchange Rate News and Insights

Euro exchange rate today: EUR rides higher as investors grow confident; despite poor Economic readings from Eurozone

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Category: Pound to Euro

Published on Wednesday, 01 February 2012 10:07

Written by Will Peters

The euro rate today finds itself up against both the US dollar and British pound.

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The euro dollar exchange rate is 0.49% higher on the day, EURUSD is at 1.3143.

The euro pound exchange rate is 0.43% higher, EURGBP is at 0.8338.

This morning equity markets are up, as is the euro, as investors grow in confidence.

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The gains in the euro exchange rate today come despite Eurozone data being generally weak on Tuesday:

German retail sales fell 1.4% on the month bringing the y/y number to -0.9%.

French consumer spending also disappointed at -0.7% m/m and -3.1% y/y.

The Eurozone unemployment rate increased to 10.4% from 10.3, in line with consensus.

However, the German labour market continues to show signs of improvement – with unemployment falling by 34k in January.

There was a general lack of commentary by Eurozone leaders on Tuesday, as most of the details on upcoming Eurozone decisions were adopted on Monday. However, this has put Greece’s PSI talks back in the limelight.

Several news sources have reported that talks between the Greek government and the Troika have also reached an impasse doubts are surfacing as whether Greece can agree to new austerity measures to manage debt levels back down to target.

Reuters reported that a deal between Greece and private sector bondholders could be reached as soon as Wednesday, but the overall deal would require public sector participation.

UBS exchange rate analyst comments that, "whether this can be achieved via the ECB, or national central banks’ writedowns remains to be seen."

The Greek Finance Minister has warned that private sector creditors could see an NPV writedown of more than 70%, which is bigger than what has been discussed previously.

Eurogroup Chair Juncker said he had not decided on whether to call a special meeting on Greece. His spokesman
noted that there are no decisions yet as to whether talks will recommence next week.

"There have been some expressions of impatience amongst European leaders over the duration of the talks. The Dutch Finance Minister warned that the talks could not drag on ‘for a couple more weeks’, while the French Finance Minister stressed that a deal was expected by the end of the week, but similar comments have been uttered before," says Berry.

Irish PM Kenny affirmed that Ireland will hold a referendum on the fiscal compact if needed.

German Manufacturing PMI and harmonised CPI figures are due on Wednesday.