EUR/GBP Rate & Comments for 25th May 2010

EUR/GBP - 1.167

Sterling gained over 1% against the euro yesterday and fell against the US dollar. The pound hit a high of 1.1646/ £1 and fell to a daily low of $1.4353/ £1 before pulling back ground towards $1.4430/ £1. The strength against the euro was fuelled by further concerns in the euro zone as the Spanish central bank took over a savings bank to avoid it collapsing. There was little reaction from the markets as the new chancellor George Osborne outlined plans to cut £6.25bn worth of public spending – the bulk of which will be used to trim the UK’s record 11% deficit. Aside from the chancellor’s announcement there was little other data out for the UK. The markets are waiting for tomorrow’s revised GDP data for the 1st Quarter. An upward revision of 0.1% to 0.3% is expected. Movement either side of this figure could see significant volatility. Get in touch now to avoid missing out.

In the Euro zone, the single currency continued to suffer as concerns over the debt crisis continued to weigh on sentiment towards the region. The takeover of a savings bank by the Spanish central bank did not help things, and in a day where most European markets were closed due to public holidays, a lack of liquidity in the market saw the euro lose ground at a faster pace than usual. Out tomorrow we have Italian retail sales data for the month and monthly industrial orders. These figures are unlikely to impact the market. Look to sentiment to drive the price today and call in for a live exchange rate to ensure you achieve your budgeted rate.

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