Friday 29th July 2011
Good morning. Sterling rose against the Euro yesterday after the Euro weakened on concerns about the EU debt problem spreading, weakening the single currency and pushing rates up. Poor UK data however pushed the Pound down slightly against other currencies. At 08:30am this morning rates are as follows:
• GBP/EUR 1.1431
• GBP/USD 1.6312
• GBP/AUD 1.4908
• GBP/NZD 1.8808
• GBP/CAD 1.5506
• GBP/ZAR 11.029
• GBP/JPY 126.52
• GBP/DKK 8.5139
• GBP/NOK 8.8411
• EUR/USD 1.4266
Sterling up vs Euro on debt fears
Yesterday there was a broad sell off of the Euro after an Italian bond auction, and fears the debt problems will spread to other countries weakened the Euro, pushing it up into the €1.14's. It was only a week or two ago rates were at €1.10, and the gains have been largely driven by problems in the EU rather than any particular strength in the Pound.
Pound still weak after more poor data
British retail sales fell at their fastest pace in a year in July and stores expect a further deterioration in August, as hard-hit consumers clamp down on spending, a survey by the Confederation of British Industry showed.
This just adds to the poor economic picture. UK data has been lacklustre of late, with the CBI figures reminding investors that consumers are struggling and that growth in the current quarter is unlikely to be encouraging.
After figures showed the economy barely grew in the second quarter, BOE policymaker David Miles said on Wednesday the recovery appeared to have slowed and there is a risk the economy could tip back into recession. For this reason we think the Pound could continue to fall.
US Debt issues could help Sterling
Analysts said sterling was likely to benefit from any downgrade to U.S. debt by rating agencies as the UK, with a sound fiscal plan in place, is likely to retain its AAA rating. The problems in the US have weakened the US Dollar, and with the Euro also facing problems, investors like the fact the UK has a firm plan in place, and as such the Pound may benefit from any weakness in the other major currencies, despite poor data.
Today's Data
UK figures today are Consumer Credit, Mortgage Approvals and Money Supply. From the EU we see inflation data, and Canada and the USA both release GDP figures.
If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.
Labels: Pound Euro gains