EUR/GBP Rate & Comments for 15th July 2010

EUR/GBP - 1.199

Sterling hit a 2 month high against the US dollar yesterday as UK jobs data came in better than expected. The number of people claiming unemployment fell by more than expected, showing a fall of 20,800 people against an expectation of 20,0000. In addition, the rate of unemployment fell from 7.9% to 7.8% driven by a record boost in part time employment. The data was the catalyst to see sterling jump by nearly 1% to nearly $1.53/ £1 - the highest rate in 2 months. Concerns over the banking sector held sterling back, as the FTSE 100 traded down 0.4%. Against the euro, the pound gained marginally to trade back above the 1.20/ £1 level. However, movement between sterling and the euro has been fairly limited this week with most off the volatility coming against the US dollar. In terms of data, there is little out today in the UK so get in touch to ensure you take advantage of the strong US dollar price.

In the euro zone, inflation figures came in as expected with year on year CPI inflation showing 1.4% the ‘core’ CPI showing 0.9% - both of which had been widely predicted. Month on month industrial production underperformed however, posting 0.9% growth against an expectation of 1.2%. Despite holding at around 1.20/ £1 for the last few days, analysts are still expecting the euro to weaken against sterling but this is reliant on the Bank of England raising interest rates or at least ending the asset purchase programme, which is still on pause. Sovereign debt is still a concern, but seems to have taken a back seat. It is not lurking far below the surface though – call in now to ensure you buy at the right time.

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