22nd July 2010
Good morning. The BoE minutes yesterday showed only 1 member voted for a rate hike. This weakened the pound slightly, however continued Euro weakness meant GBP/EUR rates actually rose slightly. Exchange rates at 08:30am are as follows:
- GBP/EUR 1.1874
- GBP/USD 1.5190
- GBP/CAD 1.7281
- GBP/AUD 1.7281
- GBP/NZD 2.1221
- GBP/CHF 1.5875
- GBP/JPY 131.50
- GBP/ZAR 11.451
- EUR/USD 1.2788
BoE Interest Rates
Sterling fell against the dollar and euro yesterday after minutes from the Bank of England showed further easing was discussed. Only 1 member voted for a rate hike, and the pound fell slightly as a result. Policymakers gave a downbeat tone on growth, even as they warned near-term inflation would remain high.
Euro weakens pushing GBP/EUR rates up
The single currency weakened further in anticipation of the bank stress tests, due tomorrow. European policy makers have expressed confidence their banks would pass the tests, though some analysts said investors remain skeptical about the severity of the health checks.
“The euro is generally weaker so euro/sterling is down but overall I think the outlook for the pound is negative after the MPC questioned the UK’s growth outlook,” said Ian Stannard, senior currency analyst at BNP Paribas.
So, the Euro is weak but so is Sterling, so rates could move either way in the coming days.
Key data for this week
There are retail sales for the Uk today, but markets are generally waiting for tomorrows GDP data from the UK, along with the stress tests. Once these have been released, we’ll have a better idea on which way rates may move.
To protect against adverse movements in volatile times like these, contact as to discuss Stop Loss orders. This is where your currency is bought automatically if rates fall below a pre-agreed level. This allows you to still aim for a better rate, without leaving yourself open to a more expensive purchase if rates move against you.
If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what’s happening in the currency markets.