EUR/GBP Rate & Comments for 2nd July 2010

EUR/GBP - 1.213

Sterling jumped to an 8 week high yesterday against the US dollar of $1.5144/£1 as the dollar fell due to poor manufacturing, housing and employment data. The pound started the day poorly after lower than expected Chinese manufacturing data cast doubts over the global recovery. UK manufacturing data showed a drop from 58.0 to 57.5 which added to sterling’s woes. However, the pound rallied by over 1% against the US dollar after a similar measure of manufacturing activity in the USA showed the sharpest drop since December 2009. In addition, poor housing sales data added to the dollar’s problems. Against the euro, the pound weakened after concerns over European sovereign debt eased. In terms of data, there is construction PMI data out in the UK today which is expected to show a small improvement. With a lot of volatility, yesterday was a classic example of why it is so important to speak to a currency specialist sooner rather than later in order to take advantage of large upswings and avoid buying at the bottom of the market. Call in now for an up to date assessment of where things are heading for the pound.

In the Euro zone, the euro recovered after a poor start to the week. It was down earlier in the week as financial markets closely followed the repayment of 440bn worth of emergency loans paid out to banks, but in the end the repayment date passed without a hitch. Credit rating agency Moody’s had added to the euro’s woes as it downgraded the outlook for Spanish government debt. However, these concerns were eased after a Spanish bond auction for 3.5bn worth of bonds was well received by the financial markets – very much going against what had been expected, especially in light of Moody’s downbeat assessment of the situation. Out later today there is unemployment data and PPI data for the region – both of which have the potential to move the market. Get in touch now for a live exchange rate.

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