13 Nov 2013
EUR/GBP tumbles on contrasting economic momentum
FXstreet.com (London) - In sharp contrast to the positive numbers coming from the UK today, Europe’s economic recovery continues at a sluggish pace.
Eurozone factory production dropped more than consensus expectations, falling 0.5 percent compared to last month, according to data from Eurostat. The biggest declines came from durable consumer goods such as cars and electronic, down by 2.6 percent on the month.
The euro has tumbled against the pound today on contrastic economic outlooks. EUR/GBP has fallen 0.73 percent to GBP0.8385.
The weak numbers come ahead of tomorrow’s Eurozone GDP numbers, which are expected to see a slowdown in GDP growth, down from the second quarter’s 0.3 percent to 0.1 percent.
The Eurozone saw a big drop in inflation, according to data released by Eurostat earlier in the month. The weak figures helped to trigger the European Central Bank’s cut of the main refinancing rate from an already-low 0.5 percent to 0.25 percent.
The Eurozone continues to struggle with an anaemic labour market, still at 12.2 percent unemployment. One in four people aged between 16 and 25 in the area are unemployed.
Positive UK outlook
The stagnating European recovery contrasts sharply with the steadily improving UK outlook. This morning, the Bank of England forward-revised its forecast for the date at which unemployment will drop below the 7 percent threshold at which it will consider raising rates. The move came following consistently robust UK macro data and jobs numbers showing that UK unemployment dropped to 7.6 percent in the three months though September.
In the Bank of England Inflation Report released this morning, the MPC forward-revised its forecast from the second quarter, 2016 to a possible drop below 7 percent by the third quarter 2015.
Eurozone factory production dropped more than consensus expectations, falling 0.5 percent compared to last month, according to data from Eurostat. The biggest declines came from durable consumer goods such as cars and electronic, down by 2.6 percent on the month.
The euro has tumbled against the pound today on contrastic economic outlooks. EUR/GBP has fallen 0.73 percent to GBP0.8385.
The weak numbers come ahead of tomorrow’s Eurozone GDP numbers, which are expected to see a slowdown in GDP growth, down from the second quarter’s 0.3 percent to 0.1 percent.
The Eurozone saw a big drop in inflation, according to data released by Eurostat earlier in the month. The weak figures helped to trigger the European Central Bank’s cut of the main refinancing rate from an already-low 0.5 percent to 0.25 percent.
The Eurozone continues to struggle with an anaemic labour market, still at 12.2 percent unemployment. One in four people aged between 16 and 25 in the area are unemployed.
Positive UK outlook
The stagnating European recovery contrasts sharply with the steadily improving UK outlook. This morning, the Bank of England forward-revised its forecast for the date at which unemployment will drop below the 7 percent threshold at which it will consider raising rates. The move came following consistently robust UK macro data and jobs numbers showing that UK unemployment dropped to 7.6 percent in the three months though September.
In the Bank of England Inflation Report released this morning, the MPC forward-revised its forecast from the second quarter, 2016 to a possible drop below 7 percent by the third quarter 2015.