Euro Pound Exchange Rate Report – 22nd November 2010
November 23, 2010 Leave a comment
Last week Sterling held ground against the Euro following the news that the Bank of England voted as expected in their policy meeting earlier this month. The positive for the pound being that only one member voted for further Quantitative Easing (QE). Regular readers will be well aware of the dangers QE poses to the value of GBP, with the original QE session in the UK playing a key role in the devaluing of the Pound against the Euro to its lowest ever levels almost two years ago. The failure of the Pound to make notable gains last week against the Euro, where the economies in some member states are still grabbing the headlines for all the wrong reasons, suggests that fear of further QE (QE2) is still weighing on the market. Considering this, it is difficult to forecast the Pound making substantial gains in the short-term and we will have to wait until the beginning of next month at the earliest for the next Bank of England meeting for any further clarity on this lingering issue.
As always further details of the data releases that could provide market movement this week can be found below, however, this week market movement may be more dramatically impacted upon by the looming financial crisis in Ireland. The problem in Ireland has been well documented but in recent months the cost of borrowing for the Irish Government has spiralled out of control and this has fuelled speculation of an EU bailout, with the estimated cost numbering in the billions. This is obviously a huge problem for Ireland itself and has caused many investors to doubt the stability of the Euro. In fact reports have been circulating that a number of key European economies will be evaluating their position within the Single Currency over the next few years.
Taking the key factors into consideration the GBP/EUR cross is very finely balanced at the moment with fundamental economic factors weighing on each currency. In the short-term it would appear that the European Central Bank (ECB) will look to act quickly to remedy the Irish debt problems and depending on whether investors view their ultimate decision to be a forced action to prevent further European crisis or a sign of EU solidarity will likely impact on the direction of the cross.
While the direction of volatility remains difficult to predict, market movement is a given in any week and this week will be no exception. To make sure you are best placed to take advantage of any favourable market movement and gain the best currency exchange rates available open an account online and speak to an expereinced currency trader today.
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