Weekly € rates and comments - week commencing 28th April 2008

 

A bit like the previous week sterling had a good end to the week. The major factor at the end of last week was weakness in German business confidence. Also the minutes of the last Bank of England meeting were released and they showed that two members of the committee voted against reducing UK interest rates which was a surprise. So relative to the last few months the last two weeks have seen a bit of stability for sterling. How long this will last or if this is the base for sterling from which to regain lost ground is too soon to say.

 

The €, which sits at €1.265/£1 inter bank, lost ground at the end of last week, as a survey showed that German business confidence had deteriorated more than expected in April. Given that the German economy is the mainstay of Euro land this is a worrying sign for Euro land. The market has even started talking about € interest rate cuts. This may be premature but when they do start to cut Euro land interest rates the € will suffer.