Good Morning. Sterling rose against the Euro yesterday due to Euro weakness, but fell against the US Dollar after negative Standard & Poor’s comments on the UK banking system.
Back by popular demand, is the rate snapshot in a new format:
(These are the rates as at 08:30am. For live rates, see live updates in the sidebar of the home page.)
UK Credit Rating
Standard and Poors, the credit rating agency has said that Britain was no longer classified as being among the most stable and low-risk banking systems in the world, adding Britain’s weak economy would continue to hinder the industry’s credit profile. We’ve been saying for some time that the UK debt levels will hinder any recovery for the pound, and this is what they’ve taking into account with this recent statement.
It was actually a new version of a report issued over a month ago, but it was still enough to unnerve investors and the pound weakened as a result.
Pound/Euro rates rose at the start of the day though, after continuing fears over some EU countries fiscal position, namely Greece and Portugal. This weakened the single currency and pushed rates through the €1.16 barrier, however the debt fears for the UK coupled with statements earlier in the weak warning about our inflation levels pared gains throughout the day.
You can read more about Greece’s problems and the likely hood of being bailed out by the EU on the BBC site here
UK House Prices
This morning at 07:00am, in some good news for the UK economy, figures showed that house prices rose by 1.2% in January compared with the previous month, according to the latest survey from the Nationwide Building Society. The lift at the start of 2010 pushed up the annual increase in prices by 8.6%.
They said that figures which showed the UK economy had crept out of recession meant that UK house prices had “gone some way beyond the recovery in the overall economy”. That isn’t really very hard though given that we’re out of recession by the thinnest margin possible – 0.1%.
- Ger – Purchasing Managers Index
- EU – Purchasing Managers Index
- EU – Unemployment
- UK – Retail Sales
- Can – Retail Sales
Have a great weekend, and the daily reports will resume as usual on Monday morning. If you need to buy currency, which is likely given your reading these forecasts, then take the next step and open a free trading facility so you can take advantage of our commercial exchange rates.