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Euro exchange rates were on the move after Eurozone economic growth and inflation numbers for October beat expectations and lowered eased expectations for rate cuts at the European Central Bank (ECB).
The Euro is outperforming the Pound and Dollar following news the Eurozone economy expanded at its fastest pace in two years in the third quarter.
Area GDP rose 0.4% in Q3 from 0.2% in Q2. French GDP growth beat expectations at 0.4%, Germany at 0.2% and Spain at 0.8%. Italy disappointed with 0%.
Inflation also came in ahead of expectations at 2.0% year-on-year in October, according to Eurostat, surpassing consensus estimates for 1.9% in an acceleration from 1.7% in September.
Core inflation for the bloc read at 2.7% y/y, which beat estimates for 2.6%.
"The developments have prompted market participants to scale back expectations for the ECB to deliver larger 50bps rate cuts providing support for the euro," says Lee Hardman, an analyst at MUFG Bank.
The Euro to Pound exchange rate has risen 0.80% in the course of the past 24 hours and now quotes at 0.8380. The Euro to Dollar exchange rate has risen over half a per cent in the past 24 hours to reach 1.0875.
"We still expect positive growth momentum next year amid a range of potential tailwinds to the economy, from stronger consumer spending to easing energy prices. Amid an improving economy globally and against low expectations, we thus see scope for Europe to surprise to the upside," says Dean Turner, Economist at UBS AG.
