EUR/GBP Rate & Comments for 24th May 2010
EUR/GBP - 1.160
Sterling recovered on Friday after a volatile week on the currency markets. With last week’s trading dominated by risk aversion related to Greece, the move by Angela Merkel to ban ‘naked short selling’ (selling assets that are not owned in order to profit from their fall in value) saw many investors rushing to buy back sterling and euro positions after having placed bets that they would fall. The pound has strengthened so far this morning and is currently up nearly 0.2% against the US dollar at $1.4480/ £1 and 1.16/ £1 (up 0.9%). On Friday we saw the budget deficit standing at £10bn for the month – the biggest ever shortfall for the month of April. This shows the scale of the task facing the new government, and even with the £6bn of cuts promised by the new chancellor, this is nowhere near enough. However, the cuts need to be finely balanced to ensure that they do not stifle growth – the reason why so many investors are negative about the pound. There is little data out today aside from some house price data. Get in touch now for a live exchange rate, as with the lack of news we could see sterling creep back up before the next piece of poor data.
In the Euro zone on Friday, Germany ratified its 148bn portion of the new rescue programme which helped ease concerns that this wouldn’t happen. However, there are concerns that the difficulties are now translating into troubles for the real economy. Financing costs are on the rise and Spanish workers are planning to strike again. In addition, business confidence dropped on Friday alongside purchasing manager data which fell more than expected. With a bank holiday across most of Europe today and no data released, there should not be too much movement. However, with markets still very jittery over the debt crisis, we could see anything happen. Get in touch now for a live exchange rate.
Exchange rates change every second - call Smart Currency Exchange for a live up-to-the-minute quote. For individual requirements, visit the SmartCurrencyExchange.com website and for companies visit the SmartCurrencyBusiness.com website.
Monday, 24 May 2010
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