EUR/GBP Rate & Comments for 16th June 2010

EUR/GBP - 1.203

Sterling had a mixed day yesterday, falling after CPI inflation data came in slightly under what had been expected. Markets were anticipating an annual rate of inflation of 3.5% and when the data showed 3.4%, investors sold the pound. This saw sterling fall to a low of $1.4684/£1 and 1.1998/£1. However, later in the afternoon the pound staged a late surge as appetite for riskier assets returned. This saw a high of $1.4835/£1 and 1.21/£1. Despite falling, inflation is still ‘disappointingly high’ - according to analysts at Investec – and should see some interesting debates over monetary policy over the next few months. Whilst interest rates are unlikely to rise anytime soon, the next major move will be to officially end the ‘quantitative easing’ programme which is (as it stands) ‘on hold’. Watch this space. Out today, we have unemployment data on the change in the claimant count and governor of the Bank of England Mervyn King speaks in London this evening. Get in touch now and discuss your requirements with a currency specialist.

In the Euro zone, the sheer scale of the poor sentiment felt towards the region became apparent today, as a measure of German economic sentiment showed a 20-point drop. The measure (out of 100) shows how investors feel about the economy, and with an expected rise, the scale of the drop demonstrated how shaky many feel about investing in the region. Other data showed that unemployment in the region showed no change. Out today, there is European inflation data. We have seen so many opportunities over the last few weeks to buy at great prices – call in now to make sure you are not losing out due to poor rates.

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