EUR/GBP Rate & Comments for 28th June 2010

EUR/GBP - 1.216

Sterling had a strong week last week as tough spending cuts announced in the emergency budget eased fears amongst investors that the UK would suffer a debt crisis akin to Greece or Spain. The pound hit a 19 month high of 1.22/ £1 and held above the $1.50/ £1 level for the first time in nearly 5 weeks. A new trend emerged that clearly showed the budget helped separate the UK from the rest of Europe in the eyes of investors. Normally, when European stock markets have fallen in the last few months, the pound has followed suit against the euro. However, last week, we saw sterling hold strong in the face of faltering European markets. With little UK data out today, the focus is on the general risk trends. Many analysts feel that there is not enough positive impetus to push the pound beyond $1.50/ £1 – get in touch now to avoid missing out.

In the Euro zone, stock markets are set to rise this morning after Asian markets strengthened overnight. The rally was caused as fears eased that the US senate would draft a harsh banking regulation bill. There had been concerns that at the meeting of the G20 leaders over the weekend, the leaders would co-ordinate some sort of global financial regulation package, but as it was the summit proved fairly inconclusive. The general outcome seemed to be that every country had slightly different issues to contend with and as a result, the respective governments would do things their own way. European money supply data out today is expected to show a further contraction in the rate of growth. Sentiment towards the region is still poor – get in touch now for a live price.

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