EUR/GBP Rate & Comments for 30th September 2010

EUR/GBP - 1.164

Sterling fell again against the euro yesterday after Tuesday’s downbeat comments by a key Bank of England policy maker left sterling under severe pressure from investors. Sterling dropped to a 4 month low of 1.1590/£1 as markets became more and more concerned over the prospect of further Quantitative Easing. Sterling held steady against the US dollar. In a speech on Tuesday, Monetary Policy Committee member Adam Posen said that the central bank should start pumping more money into the economy in order to avoid a prolonged slump of the sort that Japan saw in the 1990’s. These comments certainly came as a surprise and saw sterling follow the US dollar down against the euro. Despite dropping a long way on Tuesday, poor UK data saw sterling drop further. The pace of service sector activity came in worse than expected and mortgage approvals stayed flat. In terms of data, there is key house price data which could see sterling drop even further if this dents the UK’s prospects. Call in now to speak to one of the team and prevent yourself from losing out further.

In the Euro zone, there was no real data out yesterday and the euro continued to trade on weak US and UK sentiment hitting a 4 month high against sterling and breaching the $1.36/1. A number of technical levels were breached which also pushed the euro higher. ‘Technical levels’ are points on the graph of a currency price which traders follow very closely. Any deviation upwards or downwards means that traders buy or sell based on where they feel the prices are going. In terms of data out today, there is German unemployment data and inflation data for the Euro zone. Expect the single currency to continue to strengthen on poor UK and US sentiment, so speak to a trader today to secure your exchange rate.

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