Sterling makes gains against Euro/US Dollar

Thursday 18th August 2011

Good morning. Yesterday morning Sterling fell after poor unemployment data, however in the afternoon the Pound surged back against other currencies, creating close to the best exchange rates for several months. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1462

• GBP/USD 1.6515

• GBP/AUD 1.5755

• GBP/NZD 1.9849

• GBP/CHF 1.3136

• GBP/CAD 1.6230

• GBP/ZAR 11.758

• GBP/JPY 126.44

• GBP/DKK 8.5391

• GBP/NOK 8.9267

• EUR/USD 1.4402



BoE Minutes



Yesterday the Bank of England released the latest minutes to the recent decision to hold interest rates. They voted 9-0 to keep rates on hold, surprising many in the markets that thought 2 would vote for a hike in rates.



It didn't affect exchange rates too much, as we already know that rates in the UK are going to be left on hold for at least a year. The minutes also showed the policy-setting committee considered a new round of stimulus given a worsening economic outlook, acknowledging that problems in the euro zone were the biggest threat to the UK economy.



UK Unemployment



Data surprised yesterday, when the number of Britons claiming unemployment benefit jumped by more than expected last month, and the rate hit the highest level since February 2010. Immediately after the results, Sterling fell around 0.5% against other currencies.



Sterling surges in the afternoon



Despite the dovish BoE minutes and the higher than expected unemployment figures, Sterling surged in the afternoon, making gains against the Euro and US Dollar. After initial selling of the Pound after the poor data, traders were forced to cover these positions leading to a short squeeze on Sterling, helping push rates up nearly a cent against the Euro.



Summary



Those that need to buy Euros should consider taking advantage of these rates, as several times in the last month we have reached these levels, only for rates to quickly drop back away. With uncertainly surrounding the UK economy rates could easily drop back away.



Conversely, if we get further poor news from the EU, we could see the Euro weaken and rates climb, so it's certainly very volatile at the moment. Regardless which currency you need to buy or sell, contact us today to discuss the tools we have to help you achieve the best possible exchange rate.



Today's Data



Today’s UK data is Retail Sales, which are a barometer of consumer confidence. From the USA we have unemployment figures, Jobless Claims and Home Sales. There are no major releases from the EU today.



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Pound down vs Euro ahead of BoE minutes

Wednesday 20th July 2011
Good morning. Sterling rose against a weaker US Dollar yesterday, but fell against the Euro ahead of today's BoE minutes which could hurt the Pound further. Also buried in the news under the hacking scandal was the fact the IMF have warned on the global economy. Despite the BBC leaping onto the scandal with glee, giving it wall to wall coverage to the detriment of other news stories, markets took note of the IMF's warning. We'll look at all this in a moment after the usual rate snapshot as at 08:30am this morning:

• GBP/EUR 1.1345
• GBP/USD 1.6076
• GBP/AUD 1.4971
• GBP/NZD 1.8786
• GBP/CAD 1.5257
• GBP/ZAR 11.098
• GBP/JPY 126.80
• GBP/DKK 8.4573
• GBP/NOK 8.8700
• EUR/USD 1.4166

Sterling up against US Dollar

A recovery in equities yesterday helped Sterling rise against the US Dollar, as this created sovereign demand for the Pound. This was also helped by a rebound in UK banking stocks, however gains are still limited due to the UK's exposure to the EU debt crisis. Sterling is particularly vunerable against safe haven currencies like the USD and CHF, due to the concerns over the banking sector and our close links with the EU.

Pound down vs the Euro

Despite EU leaders struggling to reach an agreement on the debt crisis, the Pound fell against the Euro due to the interest rate differentials. The EU have raised interest rates twice this year to 1.5%, while in the UK our rates remain low at 0.5%. The better return on offer for Euros mean Sterling is struggling against the single currency, despite all the problems with EU debt.

BoE Minutes today - Sterling to fall against Euro?

Minutes of the Bank of England's July meeting are expected to add to the view that interest rates will stay chained at a record low 0.5%, and this could hurt the Pound today. Short-term interest rate markets do not price in another UK rate rise until late 2012 and concerns are growing that policymakers may edge towards considering further quantitative easing.

"At the moment there are few reasons to buy the pound apart from medium-term valuation concerns, and the many reasons to sell the pound still exist: low yield, the full effects of austerity yet to be felt and non-existent consumer activity," Commerzbank analysts said in a note.

If they mention further Quantitative Easing, expect Sterling to fall against other currencies. If however the minutes suggest that they are unwilling to pursue further QE, then we may see GBP/EUR rise back towards the €1.15 we saw recently.

Today's Data

Today we see the minutes to the recent BoE decision to hold interest rates. Any talk of Quantitative easing in the notes may cause Sterling to fall. Germany has some inflation numbers today, and the EU releases consumer confidence measures, which are unlikely to be good in light of the debt problems.

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Sterlng falls sharply on BoE minutes

Thursday 23rd June 2011
Good morning. Sterling had a very poor day yesterday, falling broadly against other currencies after the Bank of England minutes showed there may be further Quantitative Easing and no chance of an interest rate hike any time soon. Today we will look at why the Pound has fallen so much against the Euro, and the prospects for the coming weeks. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1226


• GBP/USD 1.6025


• GBP/AUD 1.5208


• GBP/NZD 1.9660


• GBP/CAD 1.5590


• GBP/ZAR 10.856


• GBP/JPY 129.01


• GBP/DKK 8.3720


• GBP/NOK 8.7629


• EUR/USD 1.4270

Sterling falls on Bank of England minutes

Yesterday the minutes to the recent BoE decision to hold rates showed the 9 member committee voted 7-2 to hold rates. The new member Ben Broadbent voted to hold rates, in stark contrast to his predecessor who had consistently voted to raise rates. This signalled that interest rates in the UK are likely to remain low for some time, and there is now a greater chance of more Quantitative Easing.

Sterling fell nearly 1% against other currencies as a result.

What do the analysts say?

"This is the first time in many months that we see other MPC members than Adam Posen talking about more QE," said Valentin Marinov, strategist at Citi.

"We think we could see sterling moving lower still on the back of the BoE minutes against the dollar and the euro. Given that sterling/Swiss franc hit fresh all-time lows more stops could be triggered fuelling further correction to the downside." So, it could well be Sterling continues to fall against other currencies, however the Greek debt problems will probably limit falls in GBP/EUR somewhat.

More Quantitative Easing?

MPC member Paul Fisher said earlier in the week that there is an increased chance of more quantitative easing, saying Britain's economic recovery was fragile and more monetary stimulus may be needed if deflation risks mount. Markets are not pricing in a full quarter percentage point rate hike until June or July 2012, a sharp move from earlier this year, when a May 2011 rate rise was viewed as a likely option.

Expectations for when UK interest rates will rise from their record low level have been drastically pared in response to a run of soft data as the country enters a long period of drastic fiscal tightening. In contrast, the EU are likely to raise rates next month, and this could put GBP/EUR under further pressure.

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Sterling falls after BoE minutes and Employment data

19th May 2011
Good morning. Sterling fell to a 6 week low against the US Dollar and slipped against the Euro yesterday, as a mixed UK employment report and a slightly dovish tone to Bank of England policy minutes painted a cloudy picture. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1330
• GBP/USD 1.6140
• GBP/AUD 1.5145
• GBP/NZD 2.0362
• GBP/CAD 1.5630
• GBP/CHF 1.4214
• GBP/DKK 8.4472
• GBP/NOK 8.938
• GBP/ZAR 11.133
• GBP/JPY 131.93
• EUR/USD 1.4242

Bank of England minutes and Employment data

The minutes of the BoE's May meeting showed an unchanged 6-3 majority seeing no need for an increase in UK interest rates, but two of the hawks, Spencer Dale and Martin Weale, said their decisions were finely balanced.

Also yesterday figures showed the number claiming unemployment benefit unexpectedly rose in April, posting its biggest rise in more than a year.

The news caused Sterling to fall against the Euro, and also to a 6 week low vs the US Dollar. Sentiment remains weak for the Pound, with most analysts expecting further losses should we have any more negative economic data.

Today's Data

Retail Sales is the main UK release today. The ECB president Jean Claude Trichet will give a speech; last time he spoke he caused the Euro to fall by over 1 % so keep a close eye on his comments. The US has some Jobless figures and Home Sales data.

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Sterling weak despite high inflation/BoE Minutes today

18th May 2011
Good morning. High inflation figures yesterday gave Sterling a boost, however the gains were short lived. Rates this morning have already started to fall, as investors acknowledged that higher inflation for now was unlikely to lead to an interest rate rise before year-end. Today we have the BoE minutes, which we'll look at in more detail after the usual rate snapshot as at 08:30am this morning:

• GBP/EUR 1.1379
• GBP/USD 1.6249
• GBP/AUD 1.5273
• GBP/NZD 2.0599
• GBP/CAD 1.5771
• GBP/CHF 1.4293
• GBP/ZAR 11.222
• GBP/JPY 131.80
• GBP/HUF 304.06
• GBP/DKK 8.4853
• EUR/USD 1.4275

High inflation for the UK, but Sterling remains weak

The UK Consumer Prices Index (CPI) annual rate of inflation rose to 4.5% in April, up from 4% in March.The rise in CPI was bigger than analysts had forecast and follows a surprise fall in the index last month.

CPI is now at its highest level since October 2008. The increasing pressure to raise rates following the jump in inflation was reflected in the currency markets, where the pound rose by more than half a cent against the dollar to $1.6285, and by almost 0.4 cents against the euro, to 1.1460 euros. This chart from the BBC illustrates inflation:
















However, gains were short lived as analysts said the data did little to change expectations that UK rates will rise from 0.5 percent in November at the earliest which is much slower than other regions including the euro zone. This has caused the Pound to fall back nearly 1 cent already from yesterdays high of €1.1460.

Today's Data - Bank of England Minutes and Employment

Weak readings for UK jobs figures this morning could add to the view that rates will stay low, even as retail sales due on Thursday are expected to rise due to extended holidays in April.

At the same time, the release of BoE meeting minutes on Wednesday will be watched closely for any shift in tone from policymakers, particularly Martin Weale, who has been voting for a rate rise but last month said he had been surprised by the economy's weak recovery.

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Sterling falls after Budget and BoE Minutes

24th March 2011
Good morning. The pound fell yesterday after less hawish BoE minutes, and the Budget that cut growth forecasts as we predicted in yesterdays post. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1508
• GBP/USD 1.6209
• GBP/AUD 1.5977
• GBP/NZD 2.1693
• GBP/CAD 1.5873
• GBP/CHF 1.4763
• GBP/ZAR 11.210
• GBP/JPY 131.04
• GBP/HUF 308.48
• GBP/AED 5.9496
• EUR/USD 1.4081

Pound falls on BoE Mintes

Yesterday minutes from this month's BoE policy meeting showed no more policymakers wanted to raise rates, with three out of nine MPC members backing a hike and the rest wanting to hold rates at a record low of 0.5 percent. Markets expected more to vote for a hike, and so the less hawkish results mean it's not likely rates will go up in the next month. This weakened Sterling and exchange rates fell.

The central bank said that there was a "significant risk" inflation could exceed 5 percent in the coming months but that it was too early to tell how strongly the economy was recovering after a surprise contraction at the end of last year.

Growth forecasts cut in Budget

In the Budget yesterday, George Osborne cut the 2011 growth forecast to 1.7% from 2.1%He also said that soaring oil prices meant inflation would remain between 4 and 5 percent this year.

Also, although borrowing projections for 2011-12 were reduced, borrowing over the 2012-15 period is seen at 36 billion pounds more than forecast in November.

"Today's budget has reinforced the fact that austerity is coming... (and) that the UK economy is in for a rough ride over the next few months and years," said Kathleen Brooks, research director at Forex.com

That was the only news in the Budget that had any real effect on exchange rates, after Sterling was already on the back foot after the BoE minutes, and the Pound fell further.

Portugal PM resigns after Budget rejected

Portuguese Prime Minister Jose Socrates has resigned after parliament rejected an austerity budget. The defeat is likely to trigger a bailout similar to the rescue packages Greece and the Republic of Ireland had to accept last year.

If so this could weaken the Euro and push GBP/EUR rates higher, however we'll have to wait and see what happens when EU finance ministers meet to discuss the issue.

Today's Data

EU data today comprises of and EU economic summit, Inflation data for Germany and the EU as a whole. From the USA we have unemployment data. UK Retail sales figures are also released today which show how confident consumers are about the economy.

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Inflation, Budget, BoE Minutes, Best Exchange Rates

23rd March 2011
Good morning. Inflation data yesterday was higher than expected, and this pushed the pound higher against the Euro slightly, but to a 14 month high against the US Dollar. We may see slight further gains after the BoE minutes this morning, but the Budget at Mid-day may take the wind out of Sterling sails. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1529
• GBP/USD 1.6364
• GBP/AUD 1.6217
• GBP/NZD 2.2087
• GBP/CAD 1.6056
• GBP/CHF 1.4708
• GBP/ZAR 11.280
• GBP/JPY 132.22
• GBP/HUF 310.49
• GBP/NOK 9.1147
• EUR/USD 1.4188

Inflation Data pushes Sterling higher

Yesterday inflation figures were above forecast, and more than double the governments target of 2%. The news increased the chance of an interest rate hike in the UK in the coming months. Against the Euro gains were limited due to the fact the EU are expected to raise rates next month.

Against the US Dollar though we hit a 14 month high. Most analysts think Sterling is overvalued though and so we expect it to drop back away in the coming days.

Boe Minutes at 09:30

This morning we'll see the minutes to the recent BoE decision to hold rates. The minutes contain discussions, differences of view, and crucially how each of the 9 member committee voted. If more than 2 voted for a hike, this may give Sterling a slight push higher when released at 09:30am.

How will the budget affect rates?

Markets await the UK government's 2011 Budget, due to be unveiled today at lunchtime, which will seek to bolster faltering growth without compromising on a tough austerity programme put in place to get public finances in order.

We don't really expect may surprises. Growth forecasts will probably be revised down. Experts expect the forecast for economic growth in 2011 to be downgraded - after figures showed a 0.6% contraction in the last three months of 2010.

But they also believe borrowing figures will not be as high as previously anticipated - up to £10bn lower than the £158bn predicted in last June's emergency Budget. Yesterday UK borrowing was again higher than expected.

Summary

We don't expect anything in the budget that will boost Sterling much, and in fact if the growth forecasts are worse than expected we may see falls in the Pound as many analysts think it's overvalued.

There may be slight gains after the BoE minutes, so if you need to buy Euros or US Dollars and want the best rates, it may be wise to consider moving before the budget and fixing a rate.



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Sterling falls again, despite BoE minutes

24th February 2011
Good morning. Sterling rose yesterday after the BoE minutes showed renewed appetite for an interest rate hike. The gains were short lived though, as focus returns to the poor performance of the UK economy. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1769
• GBP/USD 1.6160
• GBP/AUD 1.6117
• GBP/NZD 2.1690
• GBP/CAD 1.5935
• GBP/CHF 1.4998
• GBP/ZAR 11.476
• GBP/JPY 132.32
• GBP/HUF 322.86
• GBP/NOK 9.1076
• EUR/USD 1.3723

Bank of England minutes

Another Bank of England policymaker has voted for an interest rate rise, suggesting rates could be raised sooner rather than later. Spencer Dale has joined Andrew Sentance and Martin Weale in backing a rise, minutes yesterday showed. The remaining six MPC members voted to keep rates at historic 0.5% lows.

The minutes also suggested that some of those opposed to a rate hike this month would consider a rise if the economy shows signs of picking up after unexpectedly contracting at the end of 2010. The pound has rallied all year so far, as rate rise expectations have gathered steam, but analysts said investors were becoming more hesitant to push sterling higher on concerns monetary tightening could threaten the economy's fragile recovery.

"The simple takeaway of the minutes would be that there's been a move to a more hawkish view on the board given inflation concerns," said Henrik Gullberg, director of currency strategy at Deutsche Bank.

He added: "Higher rates in the UK, which would be primarily driven not so much by strong demand and activity but by inflationary fears, could be counterproductive in terms of the strength and sustainability of the recovery.

"This is not necessarily positive for the currency. That's why we haven't seen a stronger reaction from sterling."

So, while there was an initial lift in the value of Sterling immediately after the minutes, the Pound quickly dropped back away as the state of the UK recovery took centre stage again.

Today's Data

Today from the EU we see economic and industrial confidence measures. These give a good idea how consumers feel about the economy and so could affect GBP/EUR rates. From the USA there are some jobless and home sales figures in the afternoon.

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Sterling vs Euro down ahead of BoE minutes

23rd February 2011
Good morning. Why did Sterling fall agains the Euro? Yesterday Sterling vs Euro was well over €1.19, however yet again the high was short lived. Sterling fell due to risk aversion due to tensions in the Middle East, and also comments by an ECB policy member strengthened the Euro making it more expensive to purchase. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1816
• GBP/USD 1.6218
• GBP/AUD 1.6153
• GBP/NZD 2.1715
• GBP/CAD 1.6003
• GBP/ZAR 11.528
• GBP/JPY 134.00
• GBP/HUF 320.68
• GBP/NOK 9.1484
• EUR/USD 1.3719

Sterling falls on Middle East tensions

Worries stemming from growing tension in North Africa and the Middle East prompted investors pare back positions in riskier assets, including Sterling. Due to the problems causing rising oil prices, investors are moving to safe haven currencies such as the US Dollar.

ECB comments strengthen the Euro

The pound was also lagging the euro which received a boost from hawkish comments from European Central Bank policymaker Yves Mersch. Mersch was quoted as saying he would not be surprised if the bank sharpened its language on inflation. This signals that interest rates may go up in the EU before the UK, and as a result the Euro is gaining strength.

Bank of England minutes today; volatility expected

Attention this morning is on the minutes to the recent Bank of England decision to hold interest rates. The minutes show what was discussed, and how many of the members voted to raise rates. In the last meeting 2 of the 9 members voted for a rate hike.

If a third member joins them it will show there is growing speculation the Bank of England will raise rates in the coming months. This is what has led to a sharp spike in Sterling in the last week, but analysts said this could leave the currency vulnerable to position adjustment.

If there are indeed 3 members now pushing for higher rates, we expect Sterling to make some gains. As this is expected though it may already be priced into the market, and so gains if any may be limited. Take into account the rising Euro due to yesterdays comments, and it's hard to see if GBP/EUR will go that much higher than it already is.

Today's Data

As mentioned above, the BoE minutes at 09:30am is the most important release today. We also have EU Industrial order figures which are released this morning. This is a barometer of the manufacturing sector and can affect the value of the Euro. From the US there are home sales figures released later in the afternoon.

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Sterling gains on BoE MPC Minutes

27th January 2011
Good morning. After big falls on Tuesday due to lower GDP, Sterling gained slightly yesterday as the BoE minutes showed 2 MPC members voted for an interest rate hike. However, grim UK growth prospects stopped the pound gaining much. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1642
• GBP/USD 1.5912
• GBP/AUD 1.6053
• GBP/NZD 2.0669
• GBP/CAD 1.5848
• GBP/CHF 1.5037
• GBP/ZAR 11.251
• GBP/JPY 131.84
• GBP/HUF 318.36
• EUR/USD 1.3662

Sterling gains on Interest Rate expectations

The pound rose yesterday after minutes from the Bank of England's policy meeting this month showed two policymakers voted for an interest rate hike. Minutes of the Monetary Policy Committee's most recent meeting show members explicitly discussed the case for raising rates in January. The fact rates may go up means the pound gained against the Euro and other major currencies.

For most members the risks to inflation "in the medium term had probably shifted upwards," the minutes said. The fact that more members think higher rates are necessary strengthened Sterling and pushed exchange rates higher. Remember though, these minutes were released 2 weeks after the actual decision, and crucially this was before Tuesday's shock news that GDP growth has contracted and a warning that inflation could hit 5%.

Some MPC members were concerned a rate increase could be "misinterpreted as a signal that the committee would attempt the bring inflation back to the target excessively rapidly". A "relatively sharp tightening" could hurt activity and confidence, the minutes say.

Analysts said that there was evidently now much more concern about inflation on the MPC. "I don't think the BoE minutes will change the outlook," said Paul Robson, currency strategist at RBS Global Banking.

"The market may be pricing in chances of a rate hike but the UK faces the possibility of no growth and high inflation. There are concerns about stagflation and sterling will find it difficult to rise much." So, while the pound has gained slightly, the concerns over growth stopped Sterling gaining much against the Euro.

The poor GDP data will raise concerns about whether the UK economy is robust enough to withstand the government's harsh austerity measures aimed at tackling the fiscal deficit. Sticky inflation meanwhile will heighten the BoE's dilemma on whether to raise interest rates or not. While this uncertainty remains, Sterling exchange rates will remain volatile.

Today's Data

Today we see a raft of data from the EU so expect some movement in GBP/EUR rates. Consumer confidence, Economic Confidence and Industrial confidence are all released at 10am. From the USA we have various measures of unemployment. Jobless figures are very hard to predict and so expect some movement in GBP/USD rates today

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Sterling falls on revised GDP Sterling/Euro

23rd December 2010
Good morning. Yesterday a downward revision in UK economic growth reminded investors the country's recovery remains fragile. The revised GDP figures weakened Sterling against the Euro, and hit a 3 month low against the US Dollar. Rates at 08:30am this morning are as follows:

• GBP/EUR 1.1739
• GBP/USD 1.5389
• GBP/AUD 1.5338
• GBP/NZD 2.0636
• GBP/CAD 1.5581
• GBP/CHF 1.4636
• GBP/ZAR 10.395
• GBP/JPY 127.64
• GBP/HUF 322.92
• GBP/DKK 8.7436
• EUR/USD 1.3106

Revised GDP weakens the Pound

The UK economy grew less than previously estimated between July and September, revised figures have shown. The yearly estimate was also cut, with the ONS saying that GDP in the third quarter had grown by 2.7% compared with the same point last year, down from the previous estimate of 2.8%.

Market participants said the pounds losses were exacerbated in holiday thinned markets, and analysts expected further losses would be limited after Bank of England minutes showed growing concerns about inflation risks. Rates fell against the Euro to the low €1.17's and to a 3 month low vs the US Dollar.

US growth revised up

In contrast to the UK, US growth was revised up and this strengthened the US Dollar making it more expensive to purchase. GBP/USD is now at a 3 month low due to a weak pound and stronger dollar.

Bank of England minutes

The Bank of England's Monetary Policy Committee (MPC) has split three ways again over interest rates and quantitative easing (QE). Minutes of the MPC's December meeting showed that one of its nine members again wanted QE to be expanded, while another continued his call for interest rates to rise to 0.75% from 0.5%.

However, eight MPC members voted for both rates and QE to stay unchanged. Rising inflation risk could put pressure on the central bank to tighten monetary policy, which would be supportive for the pound as it boost the yield on UK assets. We don't expect an interest rate hike for at least 6 months though, so gains for the pound are limited due to this.

China offers to help Eurozone

China has offered its support to eurozone countries to help them through the debt crisis that has gripped the region. "We are ready to support the eurozone to overcome the financial crisis and realise economic recovery," said foreign ministry spokeswoman Jiang Yu.

She added that the eurozone would become "a major market" for China's foreign exchange investments. This surprised the markets and has given some support to the beleaguered single currency. The news has strengthened the Euro slightly, helping to push GBP/EUR rates down.

Today's Data

Further GDP figures and Unemployment data from the USA are the main releases today. The only UK data of note is the Index of services, which measures movements in the Gross value added for service industries. It’s quite a minor release but given the thin trade in the run up to Christmas, it may have a bigger impact than usual.

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Bank of England could weaken Sterling today

17th November 2010
Good morning. Sterling fell sharply yesterday as Bank of England Governor Mervyn King signalled more quantitative easing could be possible, erasing gains made after higher than expected UK inflation data. Rates at 08:30am this morning are as follows:

• GBP/EUR 1.1778
• GBP/USD 1.5898
• GBP/AUD 1.6308
• GBP/NZD 2.0742
• GBP/CAD 1.6271
• GBP/CHF 1.5828
• GBP/ZAR 11.214
• GBP/JPY 132.54
• GBP/HUF 326.10
• EUR/USD 1.3493

Bank of England data could hurt Sterling

The UK Consumer Prices Index (CPI) inflation rate rose unexpectedly to 3.2% in October, official figures show, on the back of higher fuel prices. Analysts had expected the CPI figure to remain unchanged at 3.1%. The higher figure prompted the BoE governor to say that it is still possible the UK will follow the US in another round of Quantitative Easing. This would weaken the pound against other currencies.

Today we will see the minutes to the recent BoE meeting, and see the differences of view. This is released at 09:30am. If the minutes show a split on the decision not to embark on more stimulus then this will increase the chances of QE in the coming months. More QE will weaken the pound, and so today is a key day in terms of where the pound will go in the coming weeks and months.

Eurozone to help with Ireland's debt situation

Plans are being made for a potential rescue programme to bail out the Irish government, if it asks for help, the EU's finance commissioner says. Olli Rehn told reporters the plan would have an "accent on restructuring its banking sector". His statement came at the end of an emergency meeting of eurozone ministers and financial institutions in Brussels.

Irish debt has weakened the Euro of late, and is part of the reason GBP/EUR rates are still close to €1.18.

Pound vs Euro forecast

Rates are high due to better UK data including the decision not to embark on further QE at the Bank of England. Irish debt has also weakened the Euro helping rates gain over recent weeks. With Ireland due to be bailed out, and today's key data possibly showing that the BoE will indeed continue with QE measures, we think the current levels may be short lived.

If you need to purchase Euros in the coming months, consider a Forward contract to fix rates while levels are close to 2 month highs. Just over a month ago rates were as low as €1.11. Should rates retreat to these levels then a €150k would cost £7000 more than today. Contact us today to discuss the options available and see how much you could save with our commercial rates.

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