Euro Pound Exchange Rate Report 23.11.09

23rd November 2009

Last week began with the release of monthly trade balance data for the Euro zone on Tuesday. This revealed a larger than expected surplus, easing some concerns that a strong Euro is hindering the economy’s export performance. This in turn improved investor risk appetite which ultimately contributed to the GBP/EUR rate rising to intra-week highs above the 1.13 level.

Further through the week an absence of any further major Euro zone economic data left the Pound’s weakness as the primary source of any Euro gains, particularly after Wednesday’s poor Bank of England minutes. However, by Friday GBP/EUR took a further downfall as the Euro gained strength after the surprise comments by the European Central Bank President Jean-Claude Trichet. In brief his comments warned that the banks should prepare for the unwinding of stimulus measures, which could be taken away promptly if the threat of inflation awakens.

As a result GBP/EUR closed down 0.83% at 1.1101, from 1.1194 a week earlier, continuing to improve market conditions for those converting Euro’s into Sterling further.

This week sees the release of German business conditions data on Tuesday and consumer confidence on Wednesday, both of which will help shape economic growth expectations for the coming months depending upon their positivity. Friday will also see the release of Euro zone business, consumer, and industrial confidence data which could support the Euro if stronger than expected. As for the UK, this week sees the release of Private Consumption, Government Spending, Imports and Exports and most importantly GDP figures all on Wednesday. With the recent array of disappointing data releases from the UK and increasingly optimistic figures from the Euro Zone, it may be a wise to consider buying Euros before the market possibly falls.

In order to take advantage of these spikes, and protect yourself from the falls you should consider “forward buying contracts”, and “limit and stop loss orders”, all of which can help maximise your returns. Visit our main website to see live currency exchange rates.


About Expedia Tenerife Property
Estate Agent living and working in Tenerife as a property consultant

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