EUR/GBP Rate & Comments for 27th September 2010

EUR/GBP - 1.174

Sterling rose against the US dollar towards the end of last week and in early trading so far today. Sterling reached a high of $1.5842/£1 – a 6 week high – after poor US housing data added to an already weaker US dollar. Strong business sentiment in Germany helped the euro jump against sterling after the figures came in far better than expected. So far today, UK house prices have fallen by 0.4% in September according to a survey by property market researcher Hometrack. This is the 3rd consecutive decline in prices and the largest drop in 18 months. Analysts cited continued uncertainty regarding the economic outlook and concerns over the impact of the coming spending cuts and tax hikes. The rate of decline in house prices is likely to fall as new supply coming onto the market moderates and demand falls. For the rest of the week, keep an eye out for GDP data and consumer confidence figures. Call in and speak to one of the team to ensure you are protected.

In the Euro zone, the euro had a strong end to the week, strengthening to 1.1750/£1 as German consumer business confidence data came in far better than expected. There were some worries last week over the Irish economy. 2nd Quarter GDP for Ireland showed a 1.2% decline against an expectation for 0.5% growth which highlighted the struggle being faced by the country and other ‘peripheral’ European economies. Out today there is money supply data for the Euro zone, which is expected to show a rise of 0.4% in the year to August. Whilst this is positive, it is clouded by the lack of lending to ‘non-financial’ entities – i.e. everyone aside from the banks. This is a key issue globally in that banks have cheap credit available from governments and they have not been passing that on to consumers. Call in now to ensure that you protect yourself against adverse market movements.

Exchange rates change every second - call Smart Currency Exchange for a live up-to-the-minute quote. For individual requirements, visit the SmartCurrencyExchange.com website and for companies visit the SmartCurrencyBusiness.com website.