Euro Pound Exchange Rate Report – 8th November 2010
November 9, 2010 Leave a comment
This past week has seen an abundance of data releases that affected exchange rates including; the positive manufacturing PMI results, which was higher than expected, but more crucially, the BoE and ECB interest rate decisions.
The fear was Mervyn King may sheepishly follow in Ben Bernanke’s footsteps with regards to QE and stimulus measure into the UK, leaving Jean-Claude Trichet and the ECB smiling with their strengthened euro. However, whilst the BoE, indeed, decided to hold interest rates at its current level, as did Monsieur Trichet, they have put on hold QE… for now at least.
These more promising results and decisions, acted as the icing on the cake for our better than expected GDP Q3 figures, pushing the pound 4 points higher than its level just weeks before, creating the best currency rates for a week. So if selling euro, it may be worth taking advantage of the current level, as we could see the pound continue to gain strength.
After ten days of promising support for the pound, the week ahead has fewer prospects, other than manufacturing production, which forecasts suggest should remain at 0.3%. It must be noted, however, movement either way can tip the scales, and rates could fluctuate like a bungee. Important figures to pay attention to if buying the euro are the GDP Q3 figures for Germany and the Eurozone, which previous quarters showed better than expected percentages. If the trend is anything to follow, we could see the euro regain it’s recently lost potency over the pound and the rates could correct themselves.
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