8th June 2011
Good morning. Sterling has continued to fall vs the Euro on UK data that shows growth is very slow, adding to the view that softness in the economy will keep UK interest rates on hold for the foreseeable future. Also this morning Moody’s has warned the UK risks having its credit rating downgraded, pushing the Pound lower. At 08:30am this morning rates are as follows:
- GBP/EUR 1.1146
- GBP/USD 1.6369
- GBP/AUD 1.5345
- GBP/NZD 2.0043
- GBP/CAD 1.6001
- GBP/CHF 1.3676
- GBP/ZAR 10.989
- GBP/JPY 130.76
- GBP/DKK 8.3103
- GBP/NOK 8.7555
- EUR/USD 1.4680
Moody’s warns on UK Credit Rating
Sterling has fallen to a new one month low versus the euro and slid to a session low against the dollar this morning, on a media report of a Moody’s warning that the UK could lose its AAA rating. The report quoted the rating agency as saying the UK could lose its top-notch rating if growth remained weak and the government failed to meet its fiscal consolidation targets.
It should be noted however that this was simply mentioned in a media interview, and is not an official release by Moodys. The markets however will still take note and this is why the Pound has fallen against the Euro today.
This is in addition to the IMF earlier in the week warning on UK growth. The news, combined with poor UK data and the fact interest rates are likely to remain on hold for the foreseeable future, has pushed Sterling lower against most currencies.
Germany releases a raft of data today including Gross Domestic Product, Trade Balance figures and Industrial Production. There are also GDP figures released for the EU as a whole. These GDP releases are quite important, and if good they will support the case for an interest rate hike in the EU and push GBP/EUR rates down. There is also an interest rate decision from New Zealand today.
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