4th March 2011
Good morning. The pound fell against the Euro in a big way yesterday, when the ECB president said in no uncertain terms, EU interest rates will rise soon. This strengthened the single currency and exchange rates have fallen. At 08:30am this morning rates are as follows:
- GBP/EUR 1.1641
- GBP/USD 1.6244
- GBP/AUD 1.6036
- GBP/NZD 1.6035
- GBP/CAD 1.5815
- GBP/CHF 1.5092
- GBP/ZAR 11.167
- GBP/JPY 133.84
- GBP/NOK 9.0411
- GBP/DKK 8.6772
- EUR/USD 1.3952
Pound falls vs Euro on ECB comments
ECB President Jean-Claude Trichet said euro zone rates could rise next month in a press conference yesterday. This stunned the markets which were expecting a rise much later this year. The ECB also pledged “strong vigilance” on rising inflation, a phrase that in the past has signalled a forthcoming rate rise.
The news caused strength in the Euro, making it more expensive to purchase and pushed rates down significantly throughout the day.
In contrast, expectations for an early UK rate rise in contrast were scaled back after a below-forecast purchasing managers’ survey on the key UK services sector.
So it now seems the EU will raise interest rates before the UK. This means it’s likely GBP/EUR rates will struggle to rise, and so if you need to buy Euro you may wish to consider the different contract options we have to help protect against adverse movements. Contact us today to discuss this.
We end the week with US unemployment and Non-Farm payrolls. This often causes significant volatility for Sterling vs. US Dollar rates as the actual figures are often very different to those forecasted.
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.