Thursday, 3 March 2011

Pound up vs US Dollar, unchanged vs Euro.

3rd March 2011
Good morning. The pound has risen again vs the US Dollar to a new 13 month high, but no change vs the Euro. Today we'll look at the reasons why, and where rates may be headed. At 08:30am this morning rates are as follows:
  • GBP/EUR 1.1778
  • GBP/USD 1.6317
  • GBP/AUD 1.6061
  • GBP/NZD 2.1898
  • GBP/CAD 1.5884
  • GBP/CHF 1.5094
  • GBP/ZAR 11.179
  • GBP/JPY 133.43
  • GBP/NOK 9.0623
  • GBP/DKK 8.7799
  • EUR/USD 1.3849

Pound vs Euro

Rates remain largely unchanged vs the Euro, despite rising against the US Dollar. The reason is interest rate expectations. For many months investors have expected the UK to raise rates and this has supported Sterling. Now however we expect a hawkish speech from the ECB after today's EU interest rate decision.

Euro

Interest Rates in the EU may now rise before those in the UK, and so this is hampering further gains vs the Euro. Moving forwards Sterling and the Euro may move in tandem as it's the same speculation on interest rates that's driving the value of GBP and EUR. For this reason it's hard to see where further gains will come from. Indeed today we have lots of EU data that could strengthen the Euro further, making it more expensive to purchase.

Pound vs US Dollar

Again on interest rates, markets are reacting to comments by the Fed that interest rates in the US will remain low. This is keeping the US Dollar weak, in addition to oil prices also keeping the USD weak. We're at a 13 month high, so if you need to purchase US Dollars speak to us about Stop and Limit orders to make sure you don't lose out on the recent gains.

Today's Data

Today is very busy for EU data. We have: Gross Domestic Product; Retail Sales; Inflation figures and an Interest Rate decision. There’s a lot that could affect GBP/EUR rates so contact us if this is the currency you need to buy or sell. From the USA there are some unemployment and jobless figures at lunchtime.

If you are 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.