Exchange Rates

A look at the currency markets shows that the euro to pound sterling exchange rate (EUR/GBP) is trading 0.42 pct higher on a day to day basis at 0.8293.

Pushing the EUR/GBP higher is the euro dollar exchange rate (EUR/USD) which has rallied in the wake of today's US Non-Farm Payroll Data release - poor data put an end to the 2014 USD rally.

(NOTE: All EUR rates here are taken from the spot markets. Your bank will charge a discretionary spread when passing on a retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here).

The euro recovery was well under way ahead of the release of today's non-farm patrol - the EUR/USD emerged from a one-month trough as investors flattened their positions ahead of this morning’s U.S. jobs report.

"The single currency had fallen after yesterday’s European Central Bank meeting saw President Mario Draghi strengthen the bank’s accommodative forward guidance. Mr. Draghi pledged to use all policy options in ensuring that deflation does not take hold in the 18-member bloc. The dovish outlook for ECB policy continues to contrast the outlook for the Fed, which should keep the euro’s upside limited," says Omer Esiner at Commonwealth Foreign Exchange.  

US dollar hit by US employment figures

The euro dollar rate then rocketed higher after the release of today's all-important U.S. payrolls report for December.

Analysts forecast the U.S. economy to have added roughly 196,000 new jobs last month, with a steady unemployment rate of 7.0%.

In the event the U.S. economy added just 74,000 jobs in the months of December, the lowest monthly rise in payrolls since January 2011 and well under the forecast of 197,000

British pound hurt by industrial data

The euro took a huge chunk out of the British pound on Friday morning when the ONS reported industrial production data that came in worse than expected.

Below are the figures:

Industrial Production (YoY) (Nov): +2.5%, expectations were for +3.1%.
Industrial Production (MoM) (Nov): 0%, expectations were for +0.4%.
Manufacturing Production (MoM) (Nov): 0%, expectations were for +0.4%.
Manufacturing Production (YoY) (Nov): 2.8%, expectations were for +3.3%.

BNP Paribas economist David Tinsley called the data "unambiguously poor".

Samuel Tombs, UK economist at Capital Economics, added: "November's weak industrial production figures signal that GDP growth in the fourth quarter is unlikely to be quite as strong as the business surveys have indicated."

Analysts are expecting the EUR/GBP decline to halt for now; however whether or not the GBP rally has truly stalled is dependent on whether the coming data releases confirm a slow down.

GBP will remain incredibly responsive to economic data so keep an eye on the calendar.