14th June 2011
Good morning. The pound has risen to a 1 week high vs the Euro. This is due to Greece having it's credit rating downgraded, causing concerns again over EU debt which has weakened the Euro slightly. There are also inflation figures for the UK today which are expected to be high, increasing the chance of a UK interest rate hike and strengthening Sterling. At 08:30am this morning rates stand as follows:
Greek debt worries weaken the Euro
- GBP/EUR 1.1360
- GBP/USD 1.6423
- GBP/AUD 1.5444
- GBP/NZD 2.0074
- GBP/CAD 1.5999
- GBP/CHF 1.3732
- GBP/ZAR 11.066
- GBP/JPY 131.90
- GBP/HUF 300.31
- GBP/DKK 8.4725
- EUR/USD 1.4452
EU policy makers are thrashing out an agreement on whether private investors should take part in the restructuring of Greek debt. This ongoing debt worries in the EU have weakened the Euro very slightly, pushing GBP/EUR to a 1 week high. The ongoing EU finance summit is discussing this and other issues that could affect the value of the Euro.
UK Inflation data today
Concerns about the UK economy have weakened the pound lately, with both Moody's and the IMF warning over UK growth. Today at 09:30 am we have some inflation data in the shape of the Consumer Price Index. It's forecast to be 4.5% for May, however anything above this would probably boost the Pound. Any gains however are unlikely to be sustained, as it's not likely the Bank of England will respond by raising interest rate, on fears that it could stall the fragile recovery.
The Pound could also take a knock later this week, as we have Jobs data tomorrow and Retail Sales on Thursday, all of which could lend to the view the recovery in the UK is stalling, which could weaken Sterling.
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Labels: EU Debt Crisis, Inflation