Thursday, 21 April 2011

Pound at 16 month high vs US Dollar, down vs EUR

21st April 2011
Good morning. The pound is up against the US Dollar, hitting the highest rate in 16 months. Against the Euro however Sterling is down, weighed by uncertainty over the UK economy and the timing of future rate hikes. At 09:30am this morning rates are as follows:
  • GBP/EUR 1.1271
  • GBP/USD 1.6484
  • GBP/AUD 1.5344
  • GBP/NZD 2.0586
  • GBP/CAD 1.5631
  • GBP/CHF 1.4553
  • GBP/ZAR 11.117
  • GBP/JPY 135.29
  • GBP/HUF 297.20
  • GBP/DKK 8.4049
  • EUR/USD 1.4621
Pound down vs Euro on rate hike expectations

Sterling fell sharply against a firmer Euro yesterday after Bank of England minutes showed policymaker caution about economic growth outweighed inflation worries, dimming expectations for a near-term rate hike.

The minutes showed Bank policymakers maintained a 6-3 split in favour of keeping rates on hold this month, leaving them no closer to a rate hike. Further calming the central bank's concerns about high inflation, a survey on Wednesday showed Britons' expectations for what inflation will be in a year's time fell to the lowest since September.

This news has weakened Sterling and GBP/EUR rates have fallen back into the €1.12's as a result.

Pound at 16 month high vs US Dollar

Sterling rose against the weaker US Dollar, hitting the highest rate in 16 months. Despite the weak pound causing rates to fall against other currencies such as the Euro, the US Dollar is very weak due to economic concerns and high oil prices.

So due to a weaker US Dollar, it's cheaper to buy and rates have risen this week.

Today's Data

Today from the UK we see Retail Sales, Mortgage Approvals and public sector borrowing. The US has a raft of unemployment and jobless data. There are also some confidence measures from Germany.

Markets after today will be closed until next Tuesday, so blog updates will continue as normal then. Live rates will continue to be updated on the blog 24/7 throughout the bank holiday break.

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