EUR/GBP Rate & Comments for 26th May 2010

EUR/GBP - 1.168

Sterling fell by 1% yesterday against the US dollar as investors continued to suffer from risk aversion. At one point the pound hit $1.4250/ £1 but recovered slightly towards the end of the day. Sterling performed well against the euro, breaching 1.17/ £1 before falling off the day’s high. The reason for sterling’s fall against the US dollar was that stock markets plummeted yesterday as concerns mounted over the Spanish financial system. In addition, mounting tensions between North Korea and South Korea caused markets to panic as news came through that the North Korean military had been mobilised and ordered to attack if fired upon by the South. In terms of data, the UK’s 1st Quarter GDP was revised upwards to 0.3% which was as expected and had little effect on the markets. Out today we have mortgage approval data for the UK, which is unlikely to have a huge effect on sterling. Call in now for a price, as sentiment is the key driver of currencies at the moment and could see the price move either way.

In the Euro zone, the takeover of the CajaSur bank by the Spanish central bank has triggered a new wave of risk aversion. Many analysts in the region predict that there will be further bank rescues later in the year and this news pushed up intrabank lending costs and fuelled demand for the US dollar. The euro fell to 1.2230/ $1 – within a cent of last week’s 4 year low of 1.2143/ $1. So far today we have seen German consumer confidence data fall this month and French consumer spending fall by 1.2%. Get in touch now if you are holding euros and need to exchange them, as many analysts are forecasting further euro weakness especially against the US$.

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.

EUR/GBP Rate & Comments for 25th May 2010

EUR/GBP - 1.167

Sterling gained over 1% against the euro yesterday and fell against the US dollar. The pound hit a high of 1.1646/ £1 and fell to a daily low of $1.4353/ £1 before pulling back ground towards $1.4430/ £1. The strength against the euro was fuelled by further concerns in the euro zone as the Spanish central bank took over a savings bank to avoid it collapsing. There was little reaction from the markets as the new chancellor George Osborne outlined plans to cut £6.25bn worth of public spending – the bulk of which will be used to trim the UK’s record 11% deficit. Aside from the chancellor’s announcement there was little other data out for the UK. The markets are waiting for tomorrow’s revised GDP data for the 1st Quarter. An upward revision of 0.1% to 0.3% is expected. Movement either side of this figure could see significant volatility. Get in touch now to avoid missing out.

In the Euro zone, the single currency continued to suffer as concerns over the debt crisis continued to weigh on sentiment towards the region. The takeover of a savings bank by the Spanish central bank did not help things, and in a day where most European markets were closed due to public holidays, a lack of liquidity in the market saw the euro lose ground at a faster pace than usual. Out tomorrow we have Italian retail sales data for the month and monthly industrial orders. These figures are unlikely to impact the market. Look to sentiment to drive the price today and call in for a live exchange rate to ensure you achieve your budgeted rate.

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.