Euro Pound Exchange Rate Graph June 2011 – Pound Plunges Sharply

EuroEuro Pound Graph for June 2011 – June was an appaling month for Sterling against the Euro seeing the pound plunge sharply over the past two weeks.

The GBP/EUR rate plummeted last week to the lowest since March 2010, falling against a basket of currencies as well as the Euro. Britain’s currency slid against the Euro in particular on predictions that a faltering economy will limit the policy makers’ scope to raise interest rates, as the European Central Bank lifts borrowing costs to curb inflation. A report on Thursday showed U.K. consumer confidence fell more than economists forecast in June while the Bank of England’s Credit Conditions Survey said mortgage demand is predicted to drop in the third quarter.

It was a dramatic week with market sentiment swinging from worries that Greece would go bankrupt to relief that it would get through the crisis, against a backdrop of violent protests and general strikes over austerity steps. The Greek parliament approved a detailed austerity plan on Thursday, paving the way for 12 billion euros of international aid.

Euro Pound Exchange Rate Graph –  June 2011

Euro Pound Graph June 2011

“The market is bullish on risk and looking to buy euros,” said Paul Mackel, director of currency strategy at HSBC. “The Greek issues still linger, but there is a bit of calm now with the markets’ focus on data.” Barclays Capital pushed back its forecast interest-rate hikes for the UK, saying the central bank will now most likely keep its main rate unchanged until May 2012.

The bank, which previously forecast a rate increase in November, said the change reflects weaker than previously expected economic growth and recent comments from central bank officials. This is in stark contrast with the euro zone where even with weak manufacturing surveys, little changed regarding strong expectations that the European Central Bank would raise interest rates next week.

Sterling has fallen 9 percent in the past 12 months, making it the second-worst performer among 10 developed-market currencies after the U.S. Dollar, according to Bloomberg Correlation-Weighted Currency Indexes.

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Euro Pound Exchange Rate Graph May 2011 – Pound Recovering

EuroEuro Pound Graph for May 2011 – May was a good month for Sterling against the Euro seeing the pound recover due to problems within the Eurozone

Sterling made strong gains throughout the last week in May against the Euro broadly off the back of continued market commentary regarding the problem of the debt crisis in Greece. At its best the Pound gained almost 2 Cents against the Euro from where it started at the beginning of the week.

The pound’s rise came in spite of data confirming Britain’s economy made a sluggish start to the year as household spending saw its sharpest quarterly fall in almost two years reinforced the view that UK interest rates were unlikely to rise soon. It was certainly encouraging to see that the pound has gained ground against the Euro during May and that coupled with low property prices will certainly help the Tenerife property market. It is also a much needed boost for tourism, especially if it is sustained.

Euro Pound Exchange Rate Graph– ~May 2011

Euro Pound Graph May 2011

Problems continued for Greece and the Eurozone following comments made by Eurogroup President Jean-Claude Juncker who said that should the International Monetary Fund not pay its next tranche of aid to Greece, there would be pressure on reluctant European Countries to do so.

Commenting on the GBP/EUR cross, Ankita Dudani, currency strategist at RBS said “It’s a combination of news on the euro zone, including Juncker’s negative comments on Greece. There’s a lot of uncertainty about what a debt profile would contain and how far it may go -Sterling, on the other hand, doesn’t have the same baggage.” She added that compared with the euro, the UK was in a better economic position given that it had a single monetary and fiscal policy unlike the euro zone, which is suffering from increasing political tension among its 16 member nations.

Whilst Sterling has indeed been benefiting from problems within the Eurozone, Euro purchasers should remain somewhat cautious about the medium to long term outlook for the pairing as Sterling still faces many downwards risks including PMI inflation data as well as the fact that Eurozone rates are still expected to rise again this year whilst UK rates are not expected to move until at least February next year.
This recent movement that Sterling has benefited from has far more to do with concerns within the Eurozone rather than fundamental Sterling strength. The UK economy is still a long way from being described as ‘powerhouse’ as it continues to battle rising inflation and slow growth – both of which will leave Sterling vulnerable once the furore with Greece no longer dominates the financial headlines.

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.

Sterling vs. Euro – 3rd May 2011; Positive GDP figures

EuroSterling vs. Euro – 3rd May 2011; Positive GDP figures brighten outlook for shaky UK economic recovery

The eagerly awaited UK GDP first quarterly figures for 2011 were released on Wednesday and showed the economy expanding in line with general expectation at 0.5%. Given the previous quarter’s negative 0.5% contraction last week’s positive figures depict an economy returning to growth, quelling any fears of a double dip recession.

A closer look at the figures highlights the positive impact of the manufacturing and service sectors.
Currency analysts suggest that UK GDP data was possibly too weak to prompt a Bank of England (BoE) rate rise as soon as next month, although it has still left open the possibility of a rate hike in the summer.

Latest Euro Pound Exchange Rate Graph– April 2011

Euro Pound Exchange Rate Graph April 2011

Indeed, should UK figures show consistent improvement throughout the month of May, then a summer BoE rate rise is still a possibility. As it stands however, the positive figures are too often coupled with negatives ones, leaving the UK recovery in a fragile state. Concerns over the underlying strength of the economy and its ability to withstand the fiscal squeeze remain firmly intact.

In summary, Sterling-Euro rates remain low and may well do so for some time. Therefore if you have a requirement to buy Euros click the link below to open an account with us today – free of charge and without any obligation.

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.

Euro Sterling – pound nearly hits 12 month low

Euro18th April 2011 – Euro versus Sterling, the pound nearly hits a 12 month low.

The pound continued its downward trend against the Euro last week, with lower inflation figures from the UK weakening Sterling. At one point rates were near a 12 month low, before staging a small recovery at the end of the week:

The Consumer Price Index (CPI) figures released last week showed a fall in inflation for the first time in 8 months. The fall in food and soft drink prices was the main cause. The figure was lower than most analysts had expected, and lower inflation means that initial expectations of a rate hike in the UK have now been pushed back to November.

Latest Euro Pound Exchange Rate Graph – 18th April 2011

Euro Sterling Graph March April 2011

Earlier in the year the consensus was for a rate hike in the UK as soon as May, to combat rising prices. The latest numbers however have pushed this expectation back to the end of the year.  The news weakened Sterling and pushed GBP/EUR rates close to the lowest in 12 months.

Adding to Sterling’s woes was a survey last week showing the biggest drop in retail sales in nearly 6 years, highlighting the problems facing the UK as the government’s tough austerity measures hit consumer spending, and jobs data on Wednesday will also be closely watched.

“The economic data that we’ve had out of the UK gave a lot of ammunition to sterling bears,” said Audrey Childe-Freeman, EMEA head of currency strategy at JP Morgan Private Bank.  “Lower-than-expected inflation, weaker growth, that’s taking off pressure from the BoE to raise interest rates and Sterling is a loser in that environment.

We’ll know a bit more about the Bank of England’s take on interest rates this Wednesday when the minutes to the recent decision to hold rates are released. These minutes released at 09:30am on Wednesday will show how the 9 member committee voted including differences of view.

As the chart above illustrates, there was some respite to the downward trend, with a slight recovery in rates towards the end of the week as the EU’s debt problems resurfaced. Following Portugal’s request for support, there was speculation Greece would again have to re-structure its debts, weakening the Euro slightly.

In summary, rates are low and despite slight Euro weakness, interest rate expectations have and will continue to drive rates. With markets closed on Friday and next Monday for Easter and limited UK data being released this week

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.

Euro versus Sterling – 10th April 2011 – Status Quo

Euro10th April 2011 – Euro versus Sterling, the current Status Quo.

In a move that had been widely anticipated since their March meeting, The European Central Bank (ECB) announced on Thursday that the Governing Council had voted to raise the key benchmark interest rate from 1 percent to 1.25 percent. As the ECB looks to drain liquidity from the market, following unprecedented stimulus measures over the past few years in order to prop up growth following the recession, the rate hike may indeed be considered a move back towards normality or is it simply a status quo situation? The hike had almost totally been factored-in to the markets before the announcement and so failed to strengthen the Euro as some might have previously suspected would have happened. The hike, aimed at curbing inflation, could spell trouble for weaker economies in the Eurozone which desperately need to encourage growth. All eyes will now turn to next month’s meeting. Looking into the future, Jean-Claude Trichet indicated at an ECB news conference that more euro zone rate rises were in store.

Latest Euro Pound Exchange Rate Graph – 10th April 2011

Latest Euro Pound Exchange Rate Graph

The Bank of England (BoE) contrastingly decided against raising its key interest rate, maintaining its current 0.5 percent rate. Whilst The BoE had been widely expected to hold rates for a consecutive 25th month, their decision was bolstered by the release of weak manufacturing figures earlier in the week. The majority of voting members emphasised the need for more evidence on the strength of the economic recovery before changing their stance. Most onlookers see a diminishing chance of a rate hike in May. The policy meeting minutes are likely show another 6-3 split within the Monetary Policy Committee (MPC) – however, it is worth considering that a growing shift within the committee could stimulate a bullish reaction in the British Pound as investors wait for the central bank to steadily normalize monetary policy in the short term. The details of the voting pattern and the debate among BoE policymakers will not be made public until the minutes are released in around two weeks’ time.

In response to Portugal’s request for financial assistance, European Union Monetary Affairs Commissioner Olli Rehn said that the bailout package is likely to reach EUR 80 Billion. It is felt that the Portuguese face an uphill battle to meet its debt obligations due up in June as the government faces rising financing costs. Mounting fears that Spain will be the next country to file for a euro bailout has had implications on keeping the euro weak. On a more positive note for the Euro, the single currency rallied to an unprecedented yearly high on Friday on the back of an improved outlook for future growth. The Euro currency may continue to strengthen over the near-term as the European Central Bank shows an increased readiness to tighten monetary policy further this year. So in summary, Sterling-Euro rates remain low and may well do so for some time, the current status quo.

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.

Sterling vs. Euro 4th April 2011 – Sterling hits 5 month low

Euro4th April 2011 – Sterling vs. Euro – Sterling hits 5 Month Low

Sterling fell to a 5 month low vs. the Euro last week, on expectations that interest rates in Europe will rise faster than in the UK and talk of month-end demand from central banks. Sterling’s falls were exacerbated by sterling selling against the Australian dollar, related to insurance payments for flood damage in Queensland.

“There is a sense that the UK economy is going through a ropey phase and selling in sterling has been very steady since last week,” said Michael Derks, currency strategist at FXPro. “Further gains look likely while the market embraces the more positive aspects of the euro area periphery story, ECB tightening and softening UK data,” he said.

Following Thursday’s movement, the euro was broadly firmer as above-forecast euro zone inflation cemented the case for higher interest rates from the European Central Bank (ECB). Markets see the tightening cycle starting in April.

Current Euro Sterling Graph – 4th April 2011

Euro Sterling Exchange Rate Graph 4th April 2011

Manufacturing growth slowed more than expected in March but companies still ramped up prices at a record rate to cover rising costs, a survey showed on Friday. The Markit/CIPS manufacturing PMI headline index fell to a five-month low of 57.1 in March from a downwardly revised 60.9 in February. Analysts had expected only a slight dip to 60.6.

On a brighter note for sterling, Housing prices increased and the manufacturing survey also showed that companies’ raw materials costs had continued to rise in March, albeit at a slightly slower rate than in February. And companies continued to take on new staff, though not at February’s record pace.

Rising job creation, a surprise rise in house prices and further growth in the manufacturing sector are encouraging signs. However, the economic outlook is still uncertain and the slowdown in the pace of expansion in the sector will not ease the dilemma facing Bank of England policymakers over how to tackle persistently above-target inflation, without harming economic recovery.

The pound fell off the back of the figures, but analysts noted that the manufacturing sector was still on course to make a strong positive contribution to first-quarter GDP growth, which may work to ease concerns of the UK slipping back into recession.

Money markets have pushed back expectations for the first rise in interest rates from a record low 0.5 percent to August from May, largely as a result of weak news on consumer activity. “The Monetary Policy Committee’s balancing act between growth and inflation has perhaps become even more precarious,” said Markit economist Rob Dobson. Markit said the slowdown in demand was most pronounced in the consumer goods sector, which was virtually stagnant, and indicated a fall in domestic orders for such goods.

Rising inflation, muted wage growth and the prospect of government spending cuts have hit consumer morale and dented retail sales, spelling bad news for an economy which has historically been heavily reliant on household spending.

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