Sterling heads south

6 August, 2012

Robin Haynes

Last week saw a reversal of recent fortunes for the Pound, as rates for exchanging Pounds to Euros dropped around 2c. Rumours that the European Central Bank will do “whatever is necessary” to support Spain and Italy in the credit markets, strengthened the single currency in a clear change of sentiment.

If you are buying Euros, rates are now 3c below recent highs, but still 10c better than as recently as November.

Against the US Dollar, Friday’s labour market figures were much better than expected, but the Dollar weakened (became cheaper) despite the figures, as investors sold off US Dollar positions back to the Euro.

Today we have no major data expected, so last week’s themes may continue, with Thursday’s European Central Bank monthly report the most intriguing event this week. Will the ECB continue their bullish talk and make the Euro more expensive, or will bond markets continute to dictate? This is a titanic financial battle which affects all currencies – not least the Pound which of course is vulnerable to continued turbulence in the single currency area.

For the latest news and rates for your own transaction, contact Currency Index and we will be happy to assist.