27th April 2011
Good morning. Sterling fell yesterday against the Euro, pushed down by broad strength in the single currency. The pound also faces more selling pressure if weak UK GDP data further dampens expectations for an interest rate rise in the coming months. At 08:30am this morning rates are as follows:
Sterling falls against Euro
- GBP/EUR 1.1222
- GBP/USD 1.6458
- GBP/AUD 1.5222
- GBP/NZD 2.0411
- GBP/CAD 1.5664
- GBP/CHF 1.4405
- GBP/ZAR 10.944
- GBP/JPY 134.52
- GBP/HUF 296.44
- GBP/NOK 8.7352
- EUR/USD 1.4662
Traders said demand from a UK bank for euros against sterling yesterday strengthened the single currency, pushing GBP/EUR rates lower. It also had a knock-on effect on the pound versus the dollar, pushing it further away from a 16-month high hit last week.
Mounting speculation earlier this year that the Bank of England would soon raise interest rates put sterling on a broad upward trend. But an uninspiring run of UK data recently, including figures for industrial production, has prompted investors to take bets off the table that rates will rise from a record low 0.5 percent next month.
GDP figures today
At 09:30am today we see UK GDP data. It's the most important UK release of the week, and it's likely to cause volatility for the pound today.
"A weak GDP reading may completely take off the table the possibility of a May rate rise and seriously question whether rates will rise in August," said John Hydeskov, currency strategist at Danske.
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Labels: GDP Figures, UK Interest Rates