We have updated our privacy policy and terms & conditions. Find out more here.

Euro Rises On Market Optimism; Pound Falls On Contraction Risks

By  |  Forex  |  Nov 23, 2012 07:12AM GMT  |   Add a Comment
Euro Rises On Market Optimism; Pound Falls On Contraction Risks
By   |  Nov 23, 2012 07:12AM GMT
Markets were at first disappointed with the want of a Greek agreement among the European leaders during their meeting in Brussels this week, but hopes were renewed when German Chancellor Angela Merkel expressed optimism that a decision would be reached on Monday when the finance leaders reconvene to further discuss the Hellenic Republic's debt restructuring program. As a result, the euro rose in the previous European trading exchanges, In contrast, the Great British pound fell on weak economic fundamentals, raising fears of a contraction in the fourth quarter.

The euro is expected to find support from the release of the European PMI data, showing that manufacturing and services-activities in the currency union in November were not as weaker as markets initially expected. But considering that the manufacturing and services sectors remain in the contraction territory, the single currency is likely to trim down gains versus the pound.

Today, markets look to the EU Budget Summit, wherein the leaders would discuss the currency union's seven-year budget. A deal that would put first the interest of the region rather than the individual interests of each member state, is seen to extend support to the shared currency.

In the UK, the CBI Industrial Order Expectations report showed manufacturers' expectations of a reduced output in the next three months, while overall orders are relatively flat, according to the CBI. The factory orders index came in at -21 points this month, from October's 23 point-figure, the lowest level since December of 2011.

Although the Sterling benefits from the uncertainties in the euro region, economic challenges within are seen to weigh on it versus its peers. With signs that Britain’s economy is struggling to recover, the sterling is seen to face mounting pressure. As such, a buy bias is suggested for the EUR/GBP pair in today’s European trades.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Are you sure you want to delete this chart?
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?

Successfully Reported

Thank you. This comment has been flagged for a moderator.