Euro Slips Against US Dollar

The euro has fallen against the US Dollar over the past 24 hours, in contrast to the gains that it has made against the Greenback, since the European Central Bank’s (ECB) policy review meeting last week.

The ECB’s decision to cut deposit rates by 10 base points to 0.3% from 0.2%, and to extend their EUR 60 billion Quantitative Easing programme by a year to March 2017, has seen the euro rise against major currencies.

Since yesterday morning, the euro has been reduced from buying $1.1, down to $1.093 in the early hours of this morning GMT, before rising this morning past 6AM to reach just over the $1.096 mark.

The Federal Reserve will meet on December 16, where it is widely expected that they will increase interest rates, which could badly effect the euro.

Against the pound, the euro has been chaotic, jumping up and down since yesterday.

At midnight GMT yesterday, the euro was trading at just under £0.76, before sinking to £0.721 before noon, the euro then bounced back up steadily as the night progressed and into this morning.

Now the euro has reached £0.74 at 930 AM GMT, since the ECB meeting last week, mirroring the euro’s relationship with the US dollar, the euro has increased in value against sterling.

Asian Currencies Up Against the Euro

Since peaking at buying just over Y134 last week, the euro has suffered a slight fall against the Yen, reaching a relative nadir of Y132.8 at midnight yesterday.

Although the euro has enjoyed a recovery from that point, reaching Y133.8.

Against the Chinese yuan, the euro has endured a roller coater ride, falling from RMB 7.09 to RMB 0.704, and has stayed around that level until the early hours of this morning.

The euro has increased since then, climbing up to the RMB 0.708, still a higher value against the yuan for the vast majority of the time since October.

Consumer Prices Index Climbs in Germany

Official figures have revealed that consumer prices in Germany have increased by 0.4% for November this year, compared to last year.

The price index jumped by 0.1% from October this year, despite this months increase, there have been bigger consumer inflation rates in April on 0.5%, and May on 0.7%.

Food prices rose in November by 2.3% year on year, and increases by 1.6% from October.

Unsurprisingly, energy prices weighed down then overall inflation rate the most, decreasing by 7.5% year on year.

Although this was not as low as the depreciation of energy prices in September by 9.3%, and in October by 8.6%.

In total, the prices of goods, actually fell by 0.6% year on year, with low energy prices the main factor for this.

UK Interest Rate Remains at 0.5%

The Bank of England has voted overwhelmingly in favour of keeping interest rates at their current 0.5% level.

The nine member of the Monetary Policy Committee by eight votes to one, were in favour of  no change, and further predicting that  the rates will remain below the 1% mark until the second half of next year.

Historically, there has been correlations between the interest rate decisions made by the United States and the UK. With an expected rate rise to come in the United States, the UK appears to be adopting a more ‘dovish’ stance for now.