7th October 2010
Good morning. The pound has continued to fall against the Euro this morning, and Sterling is now at it's lowest since June. Things could get worse today, depending on what happens with the Bank of England result at 12:00pm. Rates at 08:30am are as follows:
Pound continues to fall against Euro
- GBP/EUR 1.1366
- GBP/USD 1.5887
- GBP/AUD 1.6063
- GBP/NZD 2.1008
- GBP/CAD 1.6028
- GBP/CHF 1.5214
- GBP/ZAR 10.857
- GBP/JPY 131.12
- GBP/HUF 308.06
- EUR/USD 1.3980
Concerns that further monetary easing may be needed in the UK has hammered the pound this week. Each day we fall lower, as markets expect the Bank of England to resume Quantitative Easing.
The BoE announce their decision on interest rates and QE today at 12pm. We don't expect any move in rates, and to be honest we also don't expect an announcement on QE today. If there is no announcement, then we could see limited recovery for Sterling, but probably not much.
While markets are uncertain what route the BoE will take, investors have sold Sterling vs the Euro and that's why the rate has been steadily declining in recent weeks. As the Euro is much stronger than the pound, it's more expensive to purchase and the net result is rates having dropped nearly 9 cents in the last month alone.
This is a staggering fall, and clients that took Forward contracts or stop loss orders when this was brewing have saved themselves huge amounts on large transfers. Given continued uncertainty in the currency markets, contact us today to discuss how you can limit any further loss on currency you need within the next few months.
UK House Prices
House prices fell by 3.6% in September from the previous month, according to the latest figures from the Halifax. However the bank, now part of the Lloyds Banking Group, said it was too early to conclude that this was the start of a sustained fall in prices.
This has simply added to the economic gloom surrounding the UK at the moment, and has helped push the pound lower vs the Euro.
Today's Data that may affect rates
At 09:30 am we have UK Manufacturing and Industrial production figures. These are a good indicator of economic health. We expect monthly gains of 0.3% & 0.2% respectively. If it's lower than this expect the pound to fall further.
We have interest rate decisions for the EU and UK today. No movement in rates is expected, however any talk of more QE on the UK side will likely put the pound under further pressure. There is also a UK GDP estimate due today.
Looks like we're in for another volatile day on the currency markets.
If you're looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.
Labels: GDP Figures, Interest Rates, Sterling weakness