After a rather mediocre start in the beginning of this week the euro had a positive performance today as German business sentiment rose again suggesting that the Eurozone member countries are finding its path out of recession.
The German Ifo business climate index climbed beyond economists expectations this morning as confidence is rising towards the country’s economy, fact which brought the euro to the highest level in almost 3 months versus the United Kingdom’s currency, nation which is posting less expressive signs of revival if compared to the wealthiest nation among the Eurozone members, Germany. Renewed optimism today also formed bullish patterns in commodity charts, favoring currencies like the Norwegian krone, since the Nordic nation is one of the main providers of oil for the European Union.
Analysts stress on the fact that German economic numbers are the main drivers of euro appreciation versus the pound, since Germany is by far the strongest economy in the bloc, followed by France. As signs of recovery become more evident, volatility among the euro and other main currencies tend to decrease, but the United Kingdom is still dealing with a deeper recession, fact which provide support for the euro to gain even further versus the faltering British currency.
EUR/GBP traded at 0.8775 as of 9:40 GMT from an intraday rate of 0.8727.
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