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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