Nov 11, 2017
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Why the Euro and the Pound Increased Their Rates?

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In the market of currencies, the euro and pound are still one of the leaders. This week the value of these currencies increased: the euro – by 1.17%, the pound – by 2.26%. Let’s find out what explains the growth of some of the most popular currencies in the world trading market.

The reasons for the euro growth

According to expert Pavel Vlasov, the positive dynamics of the exchange rates of European currencies met significant influence by the growth of industrial production. It happened as a result of an increase in the share of the European pharmaceutical companies.

According to the French statistical bureau Insee, the pharmaceutical industry increased its output by 12%. Industrial production increased by 0.6%, which exceeded the expectations of experts. At the same time, the production of transport goods fell by 4.3%.

The reasons for the pound sterling growth

Over the past month, the UK economy in the industrial sector grew by 0.7%. The reality exceeded the opinion of experts more than twice.

As for the construction sector, then the volume of construction in the last three months decreased by 0.9%.

The deficit of foreign trade in the UK is becoming less noticeable. At the moment, the international trade deficit of the “foggy Albion” has declined to 11.3 billion British pounds.

Despite the positive dynamics of the pound sterling as a whole for the last month, the expectations of actions from the UK regarding Brexit often negatively affect the national currency rate. At the moment, the priority is the agreement on the financial side of Brexit.

The ratio of the euro to the dollar this week

On Friday evening in the evening of November 10, the EUR / USD ratio reached the value of 1.1654, which increased by 0.11% per day.

In the US released a preliminary survey of UoM Consumer Sentiment, which, according to the expectations of financiers will be reduced to 100.8 points.

The European Central Bank (ECB) narrowed the incentive program in October, after several months of staying away from the business. The strong economy of the Eurozone, led by Germany, allowed the cautious ECB to reduce its monthly asset purchases from 60 to 30 billion euros, starting next year. Nevertheless, the ECB also distributed the program until September 2018 due to fears of inflation, which remain well below the ECB’s target of 2 percent.

Some Central Bank policy-making bodies expressed reservations about the gradual acceleration of incentives, arguing that the Bank should reduce asset purchases more quickly.

The heads of the central banks of Germany and Austria, who are also on the Board of Governors, went further, stating that the Central Bank should have indicated the intention to stop buying assets, and not to announce an extension. If the Eurozone indicators continue to point up, ECB President Mario Draghi will be forced to tighten the bank’s policy even more.

The positive dynamics of the euro and the pound sterling, in general, points to the growth of the economies of the countries of the European Union and Great Britain. Despite the periodic changes in the economies of the countries about the cause of Brexit and the misunderstanding with the assets of Germany, these currencies tend to grow. Watch the dynamics of the currency market for a successful investment!

 

Article Categories:
Currencies · Investing

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