Good morning. After a very poor day for the pound on Wednesday, Sterling rose against the euro on Thursday, pulling away from a 4 month low. Weaker than forecast euro zone data cast doubt over the region’s recovery, and pushed the single currency lower. Rates this morning at 08:30am are as follows:
- GBP/EUR 1.1753
- GBP/USD 1.5674
- GBP/AUD 1.6454
- GBP/NZD 2.1476
- GBP/CAD 1.6186
- GBP/CHF 1.5394
- GBP/ZAR 11.067
- GBP/JPY 132.65
- GBP/HUF 328.57
- GBP/NOK 9.320
- EUR/USD 1.3332
Poor EU Data weakens Euro
A survey of purchasing managers showed growth in the euro zone slowed in September while euro zone peripheral bond yield spreads widened against their German counterparts. Analysts said sterling remained vulnerable after Wednesday’s Bank of England minutes showed policymakers felt the case for more monetary easing had strengthened.
“Sterling had been sold quite heavily on Wednesday and there has been a bit of a corrective move, but I think sterling will remain vulnerable with the market now speculating there may be more quantitative easing,” said Geraldine Concagh, economist at AIB Group Treasury.
Markets think both the UK and USA will pump more money into the economy to support the fragile recovery. This if it happens will weaken the pound and dollar. This is why the Sterling to US Dollar rate has not fallen, as both currencies have weakened cancelling each other out.
Against the Euro however, the decline is clear. Rates have fallen from €1.22 a few weeks ago to the mid €1.17’s today. The future direction of this currency pair is unclear, so for a free consultation on how market movements can affect the cost of your currency, contact us today.
Germany, the largest economy in the EU, releases various measures of confidence in the economic climate. We expect this to cause some volatility in the value of the Euro today. From the US, Durable goods orders and home sales may affect GBP/USD.
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