EUR/GBP Rate & Comments for 6th August 2010

EUR/GBP - 1.203

It has been a strong week for sterling – especially against the US dollar. We saw sterling hit a 6 month high of $1.5968/ £1 against the US dollar earlier in the week after a run of strong banking earnings from HSBC, Lloyds TSB, Barclays and RBS. The return to profit from UK banks saw the FTSE 100 surge as investors felt that the major risk to the UK economy had now passed. This in turn saw demand for the pound rise. Better than expected manufacturing data helped increase demand for sterling, but construction data was worse than expected highlighting that there are still areas for concern. Sterling is likely to struggle to break through $1.60/£1 without significant data giving it a reason to move. The Bank of England Monetary Policy Committee kept interest rates and quantitative easing on hold as was widely expected. Out later today there is manufacturing data for the UK – call in now for a live exchange rate.

In the Eurozone, Sterling strengthened earlier in the week against euro on the strong bank earnings. Since then it has stayed in a very tight range between 1.2040/£1 and 1.2070/£1. European data has been fairly limited this week, with monthly retail sales figures showing no growth from last month. In addition, the French trade balance improved by around 2bn and the European Central Bank kept rates on hold as was expected. There is always opportunity to take advantage of volatility – despite the lack of movement this week. Get in touch now to avoid missing out and to ensure that you are minimising the cost of your international payments.

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