EUR/GBP Rate & Comments for 10th August 2010

EUR/GBP - 1.199

Sterling hit a daily high of $1.5998/£1 but slipped away as the pound yet again struggled to break through the $1.60/£1 barrier. Sterling strengthened as the fallout from Friday’s poor US jobs data continued to hammer the US dollar. With many financial options ready to trigger at the $1.60 level, as well as it being a key ‘psychological’ level there is a need for a large ‘boost’ for the pound to push through – and hold firm – away from the $1.50s. This week, we might have just that with the FOMC (the US equivalent of the Monetary Policy Committee) meeting getting under way yesterday evening. There is speculation that there may be further emergency funding injected into the US economy to help jumpstart the floundering economy. The decision is announced today. Aside from that, it was a quiet day on the economic calendar. Out later today, there is UK trade balance data and consumer confidence figures. Ensure you don’t miss out and call in now for a price.

In the Eurozone, it was yet another quiet day. The euro has kept a low profile in the last few weeks, and as one Reuters reporter rightly asked today – whatever happened to the eurozone crisis? The euro is up nearly 10% against the US dollar, lending markets have improved and demand for sovereign debt in the region has increased. One argument put forward is that the risks were wholly over exaggerated. Talk of financial Armageddon and total collapse of the single currency was the norm a few months back, but now there is nothing. There are still significant risks, and several long years worth of tough spending cuts, but the panic has (for the moment) died down. This is likely to keep the pound from hitting 1.25/£1 in the short term, so get in touch now to maximise the size of your payments.

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