Euro Pound Exchange Rate Report – 13th December 2010
December 15, 2010 Leave a comment
Last week proved to be a relatively quiet week for the GBP/EUR exchange rate with limited movements in an uncertain market. That being said Sterling still managed to reach a 10 week high against the single currency, but found high resistance at 1.20 with the Pound not yet strong enough to break through.
The limited data releases brought little change as manufacturing information was better than expected and The Bank of England held rates at the record low of 0.50% for the 21st month in a row. They also left the quantitative easing (QE) stimulus package at £200bn leaving investors wondering what to expect next from the UK in the coming months.
Investors seem to be confused as to which currency to back; the Euro or Sterling. The two economies are showing increased negativity with well documented problems from Eurozone members Greece, Ireland, Portugal and Spain, and for the UK we see an economy struggling to control inflation and refusing to distance themselves from the aforementioned QE package, leaving both in a very precarious position. Many analysts can’t help but feel that at some point in the near future one of the Powerhouse currencies could be set to drop heavily in the blink of an eye causing turmoil in the markets.
With such uncertainty it may be wise to secure a Euro requirement, either buying or selling, this week, as any information due could change things dramatically and make a transfer more expensive. Even if your currency need is not required for some time a Forward contract allows you lock a rate today with a 10% deposit and settlement is not due until a maximum of 2 years into the future taking the risk away from the markets and allowing clients to know how much a transfer will cost.
For those buying Euros, one thing to note this week will be the EU summit in Brussels on Thursday and Friday where the single currency could find some strength depending on the outcome. Ahead of the meeting both French President Nicolas Sarkozy and German Chancellor Angela Merkel have put on a united front stating that the two nations are firmly behind the Euro. Merkel said that the Euro would not be allowed to fail, because it had “a meaning that goes beyond a mere currency”. Sarkozy added “We will defend the Euro, because the Euro is Europe.”
If you have yet to open a trading facility to gain access to commercial rates of exchange click here to open an exchange rate account today and an experienced trader will be in touch to discuss your requirement and offer expert market knowledge.