Wednesday 22nd April 2015
As you can see from the chart below, today we have seen the GBP/EUR rate climb above the €1.40 mark, after the Bank of England released its latest minutes confirming interest rates will remain on hold at 0.5%. This is the best it’s been in over a month, and only a few cents away from an 8 year high.
Bank of England minutes
Today the Bank of England (BoE) confirmed they would be keeping interest rates at the record low again. This wasn’t a surprise, but the minutes to the meeting were quite hawkish, and it was these comments that have caused the Pound to rise. 2 of the members said their decision was finely balanced, and after some recent uncertainty which way rates will go in the coming months, it is now quite certain that the next move will be up.
This speculation of higher interest rates, probably in early 2016, boosted the Pound due to the higher return that may be on offer for investors. Consequently we have seen Sterling/Euro break the 1.40 level, and not far at all from the best we’ve seen in 8 years. (Those needing to buy Euros should consider taking advantage of these levels that may not last for long.)
The strengthening Pound also pushed higher against the US Dollar, breaking back above the $1.50 level.
Greek worries keeping Euro week
With an election only a few weeks away, it’s surprising the Pound is holding on against the Euro. Most expected it to drop away, however the Euro is very week indeed due to uncertainty over Greece. A Greek exit from the euro could still happen as they on course to run out of money and be unable to make their loan payments net month. There is still faith that European policymakers will avert that scenario, but while no bailout deal is in place, expect the Euro to remain cheap to purchase.
Getting the best exchange rates
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