Euro gains against Sterling
Yesterday exchange rates fell into the mid €1.17's. as the euro staged a broad recovery from lows hit last week after a credit rating downgrade on Ireland and on concerns about Hungary. According to Reuters a large euro buy order early yesterday pushed the Euro higher across the board, prompting investors to shrug off news elsewhere and cut their euro short positions against a number of currencies, including sterling.
The net result is the Euro surged and GBP/EUR rates tumbled. Just a week or two ago rates hit €1.24, however the single currency has since recovered significantly. This is good news for anyone needing to sell Euros and convert to Sterling.
What's likely to happen for the rest of this week?
We actually expect Sterling to bounce back tomorrow when we see the Bank of England minutes. The minutes will show how the vote went 2 weeks ago when the Bank of England left interest rates on hold. There's a good chance that one or more of the 9 member committee voted to increase rates, and if this proves to be the case, it will likely boost Sterling.
Comments by BoE rate-setter Andrew Sentance yesterday reiterating his view that the bank should gradually raise rates lifted sterling in early trade, but analysts said most investors preferred to wait for the minutes for more details on policymakers' thinking.
For sterling to rise we would probably need to see at least one other person join Sentance in voting for a hike. The minutes are released at 09:30am tomorrow, so anyone looking to sell Euros should consider placing a Stop Loss order to protect from rates bouncing back up.
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Labels: Best Exchange Rates, BoE Minutes, FX Stop Loss Order