Sterling falls to 5 month low vs Euro

8th March 2011
Good morning. Sterling fell against the Euro and US Dollar yesterday, mostly on continued speculation the EU will be raising interest rates soon, giving the single currency strength and making it more expensive to purchase. Today we’ll look at Sterling, Euro, and US Dollar in details. First, at 08:30am this morning rates are as follows:

  • GBP/EUR 1.1615
  • GBP/USD 1.6185
  • GBP/AUD 1.6000
  • GBP/NZD 2.1858
  • GBP/CAD 1.5745
  • GBP/CHF 1.5123
  • GBP/ZAR 11.092
  • GBP/JPY 133.42
  • GBP/NOK 9.0313
  • GBP/HUF 314.15
  • EUR/USD 1.3930

Sterling

Sterling has rallied since the start of the year on speculation the Bank of England will raise rates by at some point this year. A weak reading of the UK services sector last week prompted some investors to pare back those expectations which halted Sterlings upward trend.

Trichet’s surprise announcement on Thursday has cranked up expectations of an ECB rate rise in April, and analysts said this would also keep the euro stronger than sterling. Some analysts have said upcoming gilt redemptions put the pound at some risk of selling as it could spark some repatriation flows away from the UK currency.

Euro

The euro was supported against sterling, as investors stuck to their view that euro zone rates will soon rise, after European Central Bank President Jean-Claude Trichet reiterated the need to avoid second-round inflation effects. The news last week has caus