EUR/GBP Rate & Comments for 2nd June 2010

EUR/GBP - 1.200

Sterling rose against the US dollar and hit the highest level against the euro for eighteen months. The pound was given a boost as speculation grew that Prudential may abandon the bid for AIG’s Asian insurance business – which has this morning been confirmed. When the $30bn bid was initially announced, many traders bought US dollar positions to protect themselves against the huge market movement that a purchase of $30bn from sterling would cause. At the time, this saw a large drop in sterling’s value against the US dollar. Therefore, with the deal now potentially off, investors and traders have bought back sterling from US dollar and as a result, given the pound a well needed boost. Against the euro, the pound has breached the 1.20/ £1 level for the first time since late 2008. Strong factory data in the UK suggested that the UK had not been affected by the problems in the Euro zone to the extent that many had thought. Out later today, we have construction data and also mortgage lending data. Get in touch now for a price and to ensure you take advantage of the current movements.

In the Euro zone, the euro suffered considerably yesterday against the US dollar and sterling. Against the US dollar, the euro is at 1.22/ $1 and 1.2020/ £1 against the pound. Concerns over bad debts in the euro zone continued to push the euro lower against most major currencies. The only real data out today is monthly PPI data and this is unlikely to have any effect on the generally negative sentiment towards the Euro zone. Get in touch now for a live price – especially if you have euros that need moving into sterling or US dollars, as the rate is likely to get worse.

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