Sterling continues to fall vs Euro

13th October 2010
Good morning. Sterling has fallen again vs the Euro, after further Bank of England comments about possible Quantitative Easing. As a result, the pound has weakened and exchange rates have dropped. Rates at 08:30am are as follows:

  • GBP/EUR 1.1355
  • GBP/USD 1.5854
  • GBP/AUD 1.6079
  • GBP/NZD 2.0947
  • GBP/CAD 1.5986
  • GBP/CHF 1.5177
  • GBP/ZAR 10.826
  • GBP/JPY 129.77
  • GBP/HUF 309.72
  • GBP/AED 5.8199
  • EUR/USD 1.3968

Bank of England – more Quantitative Easing?

One of the MPC members has again been vocal in the need for more Quantitative Easing. Next Wednesday we see the minutes to the last meeting, and if QE was indeed discussed, expect the pound to fall. There has been more negative UK data too, which we’ll look at below.

UK Consumer Confidence Falls

Consumer confidence is now at its lowest level for more than a year, the Nationwide building society has said. Its monthly Consumer Confidence Index fell to 53 for September, down nine points from August. Nationwide said sentiment had been hit by fears about the government’s forthcoming spending review, which is expected to cut public sector jobs.

Its report came a day after the British Retail Consortium (BRC) said the rate of retail sales growth was slowing.

UK Economic Growth Slowing

Growth in the UK economy is slowing, with the service sector particularly affected, two surveys have suggested. report from the British Chambers of Commerce (BCC) said economic growth in the third quarter was “considerably” slower than the previous quarter. The BCC warned businesses faced serious challenges in the coming months. British Retail Consortium (BRC) said retail sales growth slowed last month, with like-for-like sales up 0.5% from a year ago.

Trade deficit narrows

The UK’s trade deficit improved slightly in August after hitting a five-year high in July. The deficit in goods and services was £4.6bn last month, narrowing from £5bn the month before, the Office for National Statistics said. The deficit on trade in goods was £8.2bn, from £8.7bn in July, but there was a services surplus of £3.6bn, against £3.7bn in July. Analysts said that the figures reveal the UK’s lacklustre export performance.

Summary

With more bad news expected from the UK and EU, rates for GBP/EUR could move either way in the coming weeks. Any bad news from any zone is likely to give investors the jitters and weaken the relative currency.

Whichever currency you need to buy or sell, contact us today to discuss the options available to protect against adverse rate movements.

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.

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