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Euro Dollar Exchange Rate Highest Since Nov 2011
Published: 31 Jan at 10 AM Tags: Pound Sterling, Euro Exchange Rate, Dollar Exchange Rate, Currency Exchange, Euro Crisis, UK, Economy,
The euro continues to trade at its highest level against the dollar since November 2011 as the dollar fell yesterday on unexpectedly poor US GDP data and the Federal Reserve voted to keep its low interest-rate policy unchanged and agreed to maintain its $85 billion a month bond-buying programme to help stimulate economic growth in the US in 2013.
The US Commerce Department unexpectedly reported yesterday that US gross domestic product declined by 0.1% in the fourth and last quarter of 2012. Analysts had expected a rise of 1% for the period.
In contrast, US employment data came in better than expected with Automatic Data Processing reporting that the rate of US private-sector job gains gathered pace in December with 215,000 jobs being added during the month.
The euro surged past the key $1.35 level against the dollar on Tuesday and held onto this level yesterday, its highest level versus the dollar since November 2011, boosted by data showing economic sentiment in the euro zone rose for the third consecutive month.
Yesterday, comments from European Central Bank policymaker Ewald Nowotny also lifted risk appetite. Nowotny said, "the recovery was seeping into the real economy."
In the UK, the Bank of England’s flagship scheme to increase the flow of credit to companies has come under renewed fire after figures yesterday showed lending continued to shrink last month. The Bank said net lending to businesses fell by £2.1 billion in December following a £2.5 billion contraction in November, prompting calls for the UK government to do more to prop up the ailing economy. This suggests that the Monetary Policy Committee (MPC) of the Bank of England will add to the £375 billion spent so far on its Quantitative Easing (QE) program in the months ahead to try and inject some life to the UK’s moribund economy but this further hits sentiment towards the pound sterling as QE is known to have a devaluing affect on a currency.
The US Commerce Department unexpectedly reported yesterday that US gross domestic product declined by 0.1% in the fourth and last quarter of 2012. Analysts had expected a rise of 1% for the period.
In contrast, US employment data came in better than expected with Automatic Data Processing reporting that the rate of US private-sector job gains gathered pace in December with 215,000 jobs being added during the month.
The euro surged past the key $1.35 level against the dollar on Tuesday and held onto this level yesterday, its highest level versus the dollar since November 2011, boosted by data showing economic sentiment in the euro zone rose for the third consecutive month.
Yesterday, comments from European Central Bank policymaker Ewald Nowotny also lifted risk appetite. Nowotny said, "the recovery was seeping into the real economy."
In the UK, the Bank of England’s flagship scheme to increase the flow of credit to companies has come under renewed fire after figures yesterday showed lending continued to shrink last month. The Bank said net lending to businesses fell by £2.1 billion in December following a £2.5 billion contraction in November, prompting calls for the UK government to do more to prop up the ailing economy. This suggests that the Monetary Policy Committee (MPC) of the Bank of England will add to the £375 billion spent so far on its Quantitative Easing (QE) program in the months ahead to try and inject some life to the UK’s moribund economy but this further hits sentiment towards the pound sterling as QE is known to have a devaluing affect on a currency.
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Source: moneytransfer.co.uk