EUR/GBP Rate & Comments for 17th August 2010

EUR/GBP - 1.216

Sterling reclaimed some of the ground lost against the US dollar last week, rising 0.4% yesterday to hit $1.5665/£1 after risk sentiment improved in trading yesterday. Against the euro, sterling slipped after house price data showed that the housing market had faltered in the last month. Data from Rightmove showed that prices slipped by 1.7% against an expected gain of 0.6%. This saw sterling drop by 0.4% against the euro as additional positive data added to the single currency. Aside from the house price data, it was a relatively quiet day for sterling. However, there is key inflation data out today and retail sales data released later in the week with the most important release being Wednesday’s Bank of England minutes likely to cause the most market movement. What most investors are looking for is whether any of the Monetary Policy Committee members joined Andrew Sentance in voting for an interest rate rise, as he did last month. Call in and speak to a trader to ensure you protect yourself from the markets moving against you.

In the Euro zone, sentiment towards the region improved yesterday and risk appetite improved after the European Central Bank revealed that it had bought minimal government bonds from the region last week. This encouraged financial markets, as it shows that there is a demand for European government bonds despite serious concerns over the ability of many governments to repay debt. As a result, the euro experienced higher demand as investors looked for riskier assets to invest in. In terms of data, inflation data came in as expected at 1.7%. Out today, there is economic sentiment data for the region which could see a surprise jump upwards after the last month. As always, get in touch to avoid missing out.

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