EUR/GBP Rate & Comments for 17th June 2010

EUR/GBP - 1.194

Sterling fell yesterday against the US dollar and euro as the pound failed to hold recent gains as renewed fears surfaced over Spain’s banking system that reduced risk appetite. The day started well for the pound, with UK unemployment data showing that the number of people claiming unemployment benefits fell by nearly 31,000 – 7,000 more than expected. However, there are still considerable headwinds facing the economy such as the pending ‘fiscal squeeze’ that will impact consumers and as such, the unemployment figures did not have as positive an effect as might have been expected. Sterling has weakened further overnight, as the new chancellor George Osborne announced the biggest shakeup of financial regulation since Labour came to power in 1997. Under the new scheme, the Bank of England is to have ultimate control of financial supervision. Any new regulation sends jitters through the financial markets and as a result the pound is down this morning. Out later today we have UK retail sales data that is expected to show a 0.1% increase on last month. Call in now for a live price.

In the Euro zone, CPI inflation came in at 1.6% as expected and the euro ended a 2 day rally against the US dollar. The European Central Bank announced a further 5% premium on Greek government debt being used as collateral for government loans as Moody’s downgraded Greek bonds to ‘junk bond’ status – the lowest credit rating. There is little other data out today. Get in touch now to avoid losing out to poor exchange rates.

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