EUR/GBP Rate & Comments for 18th June 2010

EUR/GBP - 1.198

Sterling pushed near 1 month highs against the US dollar yesterday as UK retail sales data came in much better than expected and risk appetite increased after a Spanish bond auction was well received. The pound rose to a high of $1.4838/£1 as retail sales jumped 0.6% in May following increased demand for electrical goods in preparation for the World Cup. Sterling was initially under pressure this morning, as the markets digested the chancellor’s speech last night that all but disbanded the FSA in its current form. Mervyn King also caused sentiment towards the pound to dip as he made clear that monetary policy would have to take into account the upcoming ‘fiscal squeeze’ that would follow the budget next week. Out today, there is very little in the way of data. Ensure you call in for a live exchange rate to make sure you don’t miss out on the best rate.

In the Euro zone, there had been concern that yesterday’s issue of Spanish bonds would see a lack of demand due to the poor sentiment surrounding sovereign debt in the region following the Greek crisis. However, the issue attracted more demand than expected and as a result the spread between Spanish and German bond yields narrowed – a measure that investors are happier taking more risk in the marketplace. The only data out today in the Euro zone is purchasing manager data which came in slightly better than expected. There is potential for a significant amount of movement ahead of the UK budget on Tuesday – get in touch now for a live price and to make sure you don’t miss out on the best prices.

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