Foreign Exchange Traders Buy Euro Pounds

Sterling pushes higher following CPI figures as Euro weakens on economic concern

US Dollar Exchange Rate

Today we have presentations by St Louis Fed President Bullard this morning and tomorrow will be of interest, as markets try and put further context to last weeks comments from Fed Chairwoman Yellen.

Yellen indicated that a hike in the Fed Funds interest rate could possibly occur as early as six months after the end of tapering.

Pound Exchange Rate

Sterling gained some momentum yesterday following the UK CPI figures which dropped further this month from 1.9% down to 1.7%. Initially pound was slow to move but later in the afternoon sterling pushed up 50 points against the euro and showed some smaller gains against the US Dollar.

The economic calendar is relatively light today in terms of data. Tomorrow in the UK we Retails sales figures which should be of interest.

Euro Exchange Rate

The euro exchange rates struggled yesterday against most of its major counterparts as below forecast European business data fuelled speculation that the region’s economy may struggle further to recover. The euro slid further as a German report showed business confidence fell more than forecast.

Mario Draghi spoke yesterday afternoon in a press conference but his comments were lacking real support for the euro. ECB policy makers, who lowered their benchmark interest rate to 0.25% percent in November, meet next week. The euro trading at almost $1.40 hurts the economies of Spain, Italy, France and in the long run Germany.