The Euro Rate Today: GBP Stays Near Best Levels Since 2007

The move shocked markets who were expecting a lesser figure. "Overall, the programme is probably more aggressive than expected owing to a) the partial risk-sharing and b) the potential open-endedness of the program," say Goldman Sachs in response.

The EUR ended 2014 in a firmer fashion fashion after Eurozone inflation figures failed to deliver the negative surprise markets were fearing sparking some relief buying.

However, come the start of 2015 and a combination of Greek instability and ECB policy have the single currency on the back-foot.

Dennis de Jong, managing director at UFX.com says:

“Mario Draghi has been left with little choice than to begin a more robust than expected quantitative easing programme in a bid to awake the economies of the eurozone from their slumber.”

“This play is seen by many as the last roll of the dice for the beleaguered euro. QE has had some success in the US and UK, but with such a patchwork of economies and banking systems in the eurozone, the jury is very much out. There will be a lot of people holding their breath over the coming months.”

A look at the markets shows:

• The euro to dollar exchange rate (EUR/USD) is has reached 1.1476.
• The euro to pound exchange rate (EUR/GBP) is at 0.7578.
• The euro to Canadian dollar rate (EUR/CAD) is at 1.4177.

Please note that all quotes here are taken from the spot markets - your bank will affix a spread at their discretion. But, an independent FX provider will seek to undercut your bank's offer, thereby delivering up to 5% more FX. Find out more here.

Euro at the Start of 2015

"The euro suffered a severe new year’s hangover as it staggered to nine-year lows below $1.20. A daunting lineup of negatives have moved front and center for the single currency, keeping it vulnerable to further falls over the year ahead," notes Joe Manimbo at Western Union.

Weights on the euro include Europe’s weak recovery, which has lagged far behind the U.S. economy, worries about Greece’s future and whether it would honor the terms of its bailout if an anti-austerity party should win the Jan. 25 poll, and sustained and ongoing optimism in the outlook for the U.S. and its currency.

"Meanwhile, critical data are due out Wednesday on euro zone inflation and unemployment which represent two of the weakest links in the 19-nation economy. Forecasts call for inflation to fall into negative territory which if realized would all but cement expectations for the ECB to beef up stimulus at its Jan. 22 meeting," says Manimbo.

Could euro climb to 0.81 against the pound?

The British pound has suffered losses against the euro and the dollar over the course of early 2015 trade.

The net result is that we are now predicting further advances for the euro over the sterling.

"Sterling built on its 2014 losses as it fell below $1.53 to its weakest in 17 months against the outperforming greenback. A handful of market players think the Bank of England might not boost interest rates until next year, a horizon seen as long after the Fed moves rate higher. On tap for the pound this week will be U.K. services data on Tuesday, a BOE announcement on Thursday, and factory data on Friday," says Manimbo.

No surprise is good news: Eurozone inflation data boosts euro buying interest

The euro looks to be gaining the initiative over both the US dollar and pound as we head into the final sessions of the week.

Inflation and GDP data from the Eurozone were to be the big tests for EUR sentiment today.

In this instance, no negative surprises is certainly good news and the euro would have been hammered had it sunk below the forecasted levels.

In the event Consumer Price Index (YoY) (Jul) came in at 0.4%, bang-on target.

Gross Domestic Product s.a. (YoY) (Q2) was also released and came in at 0.7%, in line with predictions.

Concerning the near-term technical forecast Ozkardeskaya says:

"In the short-run, we see strong EUR/USD support at 1.3296/1.3333 (Nov 2013 low / Aug 6th low).

"The bears are likely remain timid for a daily close above 1.3345 (MACD pivot). Solid resistance is eyed at 1.3400/25 region (optionality / 21-dma)."

Indeed, Swissquote have adopted a rather bearish stance on the back of the data:

"Soft data keeps EUR-bears in charge. Released in the morning, the 2Q preliminary data showed that German GDP contracted 0.2%, thus falling behind France’s 0.0% print.

"The Euro-zone composite GDP remains flat (0.0%) in 2Q preliminary reading, the consumer prices turn negative (-0.7%) in month to July. The FX reaction remains mixed; buyers on deflationary formation confront the ECB-doves. The mid-run sentiment remains firmly negative."