9th June 2011
Good morning. Yesterday Sterling fell on rumours that Moody’s would downgrade the UK’s credit rating. However these comments have now been downplayed and Sterling has recovered slightly. Today we have interest rate decisions for the UK and EU. At 08:30am this morning rates are as follows:
- GBP/EUR 1.1234
- GBP/USD 1.6444
- GBP/AUD 1.5506
- GBP/NZD 2.0010
- GBP/CAD 1.6083
- GBP/CHF 1.3762
- GBP/ZAR 10.980
- GBP/JPY 131.76
- GBP/DKK 8.3773
- GBP/NOK 8.8377
- EUR/USD 1.4634
Moody’s Comments downplayed
Yesterday a media report had quoted a Moody’s analyst saying the UK was at risk of losing its good credit rating. This caused Sterling to fall significantly against other currencies. However as it was not an official announcement, as I said in yesterdays post, the losses were short lived.
They have said that the outlook for the UK remains stable, however did also say that weaker growth in the UK could lead to a reassessment.
Interest Rate decisions today
Both the UK and EU announce their interest rate decisions at 12:00pm and 12:45pm respectively. We don’t expect any change from either central bank.
However, the ECB will hold a press conference after the decision, and it’s expected that this will be quite hawkish. We do expect the ECB to raise rates next month, and if the comments in the press conference support this, then the Euro could strengthen and GBP/EUR rates could fall.
If you need to buy Euros, you may wish to consider fixing a rate before this, as there is a good chance rates could drop for the reasons above.
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