EUR/GBP Rate & Comments for 3rd September 2010

EUR/GBP - 1.201


Sterling fell against the euro and US dollar yesterday as weaker than forecast housing and construction data added to concerns that the UK recovery may be faltering. House price data showed that house prices fell by 0.9% last month against an expectation of a 0.3% drop. Construction PMI data also came in much worse than expected. This added to the view of many analysts and investors that the recovery that the UK has seen over the first half of the year is not sustainable and the UK will follow the USA in faltering after an initial period of recovery. After a period of weak data, there are also concerns that the new austerity measures will impact on UK growth. After briefly recovering against the US dollar on Wednesday, a German bank was responsible for selling large quantities of sterling which saw sterling fall against the US dollar and drop to a 3 week low against the euro. Ensure you don’t miss out if sterling drops any further by speaking to a trader today.

In the Euro zone, European data came in very much as expected with quarterly GDP remaining unchanged at 1%, monthly PPI data for the region showing the expected 0.2% improvement and the European Central Bank keeping interest rates on hold at 1%. The Central Bank surprised a few people with their decision to keep policy unchanged, but the press conference later in the afternoon provided a little more clarity. In terms of data today, there is final services PMI data out today and monthly retail sales data which is expected to show a mild 0.3% increase on last month. Get in touch with a trader to ensure you get the best price.

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