Currency Rates

EURO/GBP - 1.106

To request a up-to-the minute quotation, call 0808 163 0102 or fill out our quote form: http://www.smartcurrencyexchange.com/quote.aspx

Sterling fell sharply yesterday as several factors combined to push the pound into freefall against the euro and US dollar. Sterling dropped nearly 4 cents from a high of $1.518/ £1 to $1.477/ £1 and hit 1.092/ £1 in a session of frantic trading throughout the morning. Traders started selling sterling over concerns that the UK would not be able to handle the record budget deficit. What compounded the problem was an opinion poll over the weekend which suggested that no clear majority existed going into the next election. In addition, there were 10,000 fewer mortgage approvals than expected and figures were released that showed that proportionately more traders were betting against the pound with ‘short’ positions. When Prudential announced the $35bn purchase of AIG’s Asian arm, sterling fell further as the Pru would need to sell $35bn worth of sterling to fund the purchase - flooding the market with sterling and devaluing the currency. Monetary supply figures were also flat, with many analysts stating that this constituted a failure of the Bank of England’s liquidity programme whose sole aim was to boost the money supply. When one of the worst days for sterling in over a year came to a close, the pound had recovered slightly, creeping above $1.50/ £1 and 1.105 for a time. Looking forward to today, we have Halifax house price data and construction PMI – both of which are expected to come in flat or slightly worse than last month. Aside from these figures, there is huge volatility at the moment, and we could see a large upswing or even further downward movement. Get in touch now to ensure you don’t miss out.

In the Euro zone, the unemployment rate remained steady at 9.9% despite expectations of a jump above 10% and manufacturing PMI data showed a marginal improvement. However, the euro was trading on sentiment yesterday and despite holding firm in early trading over rumours that a bailout agreement had been reached under German leadership, the lack of a concrete announcement left traders feeling that an agreement was far from being reached. As a result, the euro dropped against the US dollar, but strengthened against sterling. Looking ahead to today, there is some inflation data out which could cause movement, but given that euro and sterling are trading on sentiment, this data is unlikely to move the market. Get in touch now if you have payments to make, as the current volatility means you could rapidly start to lose out if the markets move like they did yesterday.

Call 0808 163 0102 or +44 (0) 207 898 0541 from outside the UKor fill out our quote form: http://www.smartcurrencyexchange.com/quote.aspx