EUR/GBP Rate & Comments for 19th August 2010

EUR/GBP - 1.213

Sterling recovered from 3 week lows against the US dollar after the Bank of England’s minutes from their most recent monetary policy meeting eased market speculation that the Bank would loosen monetary policy further. Sterling rose to hit a daily high of $1.5689/£1 after hitting $1.5498/£1 as speculation grew that the Bank had discussed adding further emergency funding to the economy. However, the Bank kept rates and the Asset Purchase Facility on hold and briefly discussed expanding the £200bn in the economy if it was needed, but none of the rate setters voted for any expansion in the programme. Lone member Andrew Sentance yet again called for a 0.25% interest rate hike for the 3rd month in a row. That was the only data out yesterday of importance – out today there is key monthly retail sales data which is expected to show a slight decline after last month’s World Cup related boost to retail sales. Get in touch now for a live exchange rate and to ensure you don’t lose out if the data doesn’t come in as expected.

In the Eurozone, it was a fairly quiet day for the region with most of the focus on the UK. However, the euro slipped against sterling and the US dollar after a report in German newspaper Der Spiegel stated that the austerity measures put in place to fix Greece are damaging the German economy. Euro dropped by 0.4% against the US dollar to hit $1.2805/1 and it fell by around 0.2% against sterling to hit 1.2134/£1. In terms of data, German purchasing manager data came in at 0.5% - better than expected. Get in touch now for a live exchange rate.

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