EUR/GBP Rate & Comments for 28th April 2010

EUR/GBP - 1.154

Sterling fell marginally yesterday against the US dollar and euro as fresh opinion polls cast fresh doubts over a hung parliament. Some minor mortgage approval data and retail sales data came in worse than expected but the closer we get to the election, the more obsessed the markets are with each opinion poll. The pound has managed to stay above the 1.52/ £1 and 1.15/ £1. The biggest news yesterday was the downgrading of Greek government debt to ‘junk bond’ status by rating agency S&P who also cut Portugal’s rating by two tiers. This has sent jitters through the world’s stock markets and explains the pound’s drop against the US dollar, but overall sterling has held up well. Out today, there is no UK data, so call in for a live price as sentiment over opinion polls and Greece could drive the markets anywhere.

In the Euro zone, interest paid on 2 year Greek bonds has spiralled towards 15% reflecting the extreme lack of confidence in the country’s ability to repay its debt. Follow the downgrading to ‘junk bond’ status by the rating agency S&P the FT is reporting today that the International Monetary Fund may increase its share of financial aid to the country by a further 10bn. There is little scheduled data out today – expect the markets to trade on decreased sentiment as the euro experiences the knock on effects of this major shock to investor risk appetite. Call in now for a live price.

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