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.



If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Pound falls vs Euro on Unemployment Data

20th January 2011
Good morning. Sterling slipped against the Euro yesterday as the single currency was buoyed by growing hopes that euro zone policymakers will be able to navigate their way through the sovereign debt crisis. Against the USD the pound also fell as investors took profit on long positions. At 08:30am rates are as follows:

• GBP/EUR 1.1872
• GBP/USD 1.5971
• GBP/AUD 1.6048
• GBP/NZD 2.0903
• GBP/CAD 1.5927
• GBP/CHF 1.5237
• GBP/ZAR 11.179
• GBP/JPY 131.13
• GBP/HUF 323.62
• EUR/USD 1.3446

Sterling falls due to high unemployment

UK unemployment rose by 49,000 to almost 2.5 million in the three months to the end of November, the Office for National Statistics (ONS) has said. Prime Minister David Cameron said any rise in unemployment was a "huge concern".

Most analysts, as well as the government, expect the unemployment total to continue rising, in large part due to the spending cuts designed to cut the budget deficit. The British Chamber of Commerce was downbeat:

"These figures are disappointing and once again slightly worse than expected," said the group's chief economist David Kern. "For the second month in a row, unemployment is up, employment is down and the level of inactivity has seen a marked increase."

The pound fell as a result of the poor figures against most currencies including the Euro and US Dollar.

Today's Data

Today is quite quiet on the UK side, with the only data of note an Industrial trends survey. Elsewhere we have Consumer Confidence measures from the Eurozone and a monthly report from the European Central Bank.

Watch for any further comments on higher interest rates that could push GBP/EUR down. From the US there are further home sales data released in the afternoon.

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