EUR/GBP Rate & Comments for 1st July 2010

EUR/GBP - 1.216

Sterling had a poor day today, falling back below $1.50/ £1 against the US dollar and dropping by over 1% against the euro back below 1.22/ £1. The reason for sterling’s poor performance was mainly down to the fact that the pound has performed so well over the last few days – especially against the euro. As a result, many speculators that had been betting on sterling strength decided to lock in their profits, which saw funds flow back out of sterling and saw sterling fall. In addition, the pound was hit by weaker than expected housing figures which showed that prices rose by a mere 0.1% on the month. Bank of England policy maker Adam Posen added to the pound’s woes as he issued a warning over the UK economy’s fragility – in stark contrast to his colleague’s rather ‘hawkish’ comments (i.e. arguing for interest rate rises). There is a lot of volatility – speak to a trader now about how Order to Buys can help you target specific rates throughout the day and overnight.

In the Euro zone, concerns eased slightly over debt problems in the region as there was lower than expected demand for an allotment of European central bank funds. This was good news, as there have been concerns that banks were having difficulties meeting their short term obligations. However, many analysts are still expecting yesterday’s euro rally to be short lived as the currency carries far more risk than the pound. In terms of data, there is euro zone PMI manufacturing data which is expected to stay roughly the same. Get in touch now to ensure that you don’t miss out on the best exchange rate.

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