Sterling hits 15 month low vs Euro
Friday 1st July 2011
Good morning. Sterling fell to a 15 month low yesterday against both the Euro and a basket of currencies, on month and quarter end selling. The Euro also gained strength after the ECB reiterated their view EU interest rates will rise next week. At 08:30am this morning rates are as follows:
- GBP/EUR 1.1067
- GBP/USD 1.6069
- GBP/AUD 1.4991
- GBP/NZD 1.9429
- GBP/CAD 1.5475
- GBP/CHF 1.3584
- GBP/ZAR 10.866
- GBP/JPY 129.68
- GBP/DKK 8.2540
- GBP/NOK 8.6512
- EUR/USD 1.4516
Pound falls to 15 month low vs Euro
Yesterday the European Central Bank president reiterated his hawkish comments that mean it's very likely EU interest rates will go up next Thursday. This pushed the GBP/EUR rate lower, and it hit a 15 month low due to the fact the Euro is stronger than Sterling.
The second round of votes in Greece on austerity measures also went through, calming the markets and giving more reasons for the Euro to gain strength. We also saw German unemployment figures, showing the lowest unemployment since reunification, and this also lent to Euro strength, pushing GBP/EUR rates lower.
In contrast, UK economic data is very poor and it's likely our interest rates wont move for around a year. Analysts say a rather gloomy outlook for the UK economy would keep the pound subdued against the euro and growth-linked currencies like the Australian dollar .
Latest data showed British consumer confidence fell in June, a private sector index showed on Thursday, while UK house prices were flat, just adding to the view that the Pound is a very weak currency at the moment.
Today's DataWe end the week with a raft of inflation data from the UK and EUR, in the shape of the Purchasing Managers Index. This can indicate where interest rates may move in the coming months, and given the interest rate differential has been a big driver in GBP/EUR rates of late; markets will be paying close attention to the figures. From the USA we have some Manufacturing and Construction data.
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