Pound gains against Euro after MPC minutes

Good Morning. Sterling rose nicely against the Euro yesterday after Bank of England minutes showed the recent decision to stop it’s Quantitative Easing programme was unanimous, but sentiment towards the pound remained shaky. The pound’s rise was limited however, after data showed a rise in UK jobless claims versus consensus for a drop in the count. Rates @ 08:30am are as follows:

  • GBP/EUR 1.1516
  • GBP/USD 1.5614
  • GBP/AUD 1.7428
  • GBP/NZD 2.2293
  • GBP/CAD 1.6361
  • GBP/NOK 9.2162
  • GBP/ZAR 11.902
  • GBP/AED 5.7314
  • EUR/USD 1.3552
Bank of England minutes
The pound had initially fallen slightly as the markets reacted to the number of people in the UK claiming unemployment benefit rose unexpectedly last month, and also by the largest amount since July last year.
The BoE minutes led some to believe that a resumption in its quantitative easing programme QE was less likely, with inflation jumping in January. But others believed that asset purchases could resume in the future. So, still slightly up in the air, however the fact all 9 members of the MPC votes to halt the programme for the time being is positive.

However, the MPC is in no rush to hike interest rates despite high inflation, and the labour market remains sluggish, so overall bias towards sterling remains negative and therefore I don’t think there’s much more to come for the pound. Read more about the Banks decision on the BBC site, that has a great simple to understand article.

As you can see from the chart, rates have often climbed up to the current levels, only to drop back off again. GBP/EUR rates seem to hit resistance at €1.1550 before dropping again, and that’s where we are now.

We are not far away from the highest rates for around 6 months, so if you don’t want to take the risk that rates will fall, and you need to buy Euros in the next few months, then you can loc, in todays rates with a Forward contract. This means you know what your rate will be and you are protected against markets dropping away again. You only pay a 10% deposit of the total you want to convert. The remaining 90% only needs to be sent when you need your currency.

Click the links below to open an account and find out more about how we can help you obtain the best possible exchange rate.

Open a free trading facility, and quote BLOG for preferential rates…

Open an online Trading Account

Email Me

Foremost Currency Group

Leave a Reply

Your email address will not be published. Required fields are marked *