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German & French leaders meeting fails to lift euro

Sterling is trading higher this morning thanks to external influences which have seen its major trading partner currencies fall. Cable has taken over half a cent as global markets seemed to take a breather yesterday and some risk crept back into the market. Against the euro we saw three quarters of a cent taken in the pounds fa-vour as German and French leaders failed to deliver what the markets were looking for with regards to Euro-bonds. The biggest move in GBP currency pairs came in GBP/CHF as SNB intervention saw the Swiss currency weaken across the board as it wrestles as the ‘uber’ safe haven currency. We saw sterling take over 4% off the Swiss franc to push the pair over the 1.31handle, but has slipped slightly this morning after the SNB intervention of euro buying. Market data from the UK did see a higher than expected CPI number printed which usually does lead to strength for that currency as an interest rate rise moves closer. But as we all know, interest rates are not expected to rise any time soon. Looking ahead to today we do have key UK data to be released in the form of UK jobless numbers and the BoE minutes.
No major data today, Nationwide Consumer Confidence later in the week.


The euro weakened against the majority of its most-traded counterparts after German and French leaders re-jected the assurance of bonds by the European region to contain its sovereign debt crises. We did see an initial spike for the single currency but after the dust settled, players realised there’s not going to be a Eurobond yet. Financial markets were left disappointed and the euro slid against the majors. Germany and France share an “absolute determination” to defend the euro, Sarkozy told reporters in Paris. While euro-region bonds may be “imaginable one day”, they can only be the final step in the process of European integration, Sarkozy said.  
France and Italy closed for Bank Holidays. No major data today.


Global markets seemed to take a breather yesterday after a volatile couple of weeks which did see the safe haven currencies benefit from a flight of risk. Equities seemed to stem losses and the dollar fell as a result. Fitch maintained the US’s triple A rating saying it had a stable outlook. The greenback fell against the euro and pound as funds flowed out the US currency into so called ‘riskier transactions’. Currency markets are expected to re¬main extremely volatile for the rest of the week, so limit orders and stop losses may be a wise tool to use to alle¬viate risk. This can be done via your online access with VFX. If you don't have this facility please call your bro¬ker for more information. This can be set up for you within 24 hours or the same day if already a client.
Data 14.00: TIC Long-Term Purchases 30.4B from 23.6B.


Swiss franc:
• The Swiss franc has seen huge moves this morning as volatility continues to be seen in the currency on the back of intervention moves by the SNB. The Swiss currency fell for a fifth day versus the euro as markets were expecting a peg to be announced by the SNB today. It didn’t happen as the SNB said there was to be ‘no peg’ for now, but they announced massive euro purchases to try to help bring down the strength of the Swiss franc versus the euro.


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GBP/USD                        1.6436

GBP/EUR                        1.1436

EUR/USD                        1.4368

GBP/JPY                         125.88

GBP/AUD                        1.5677

GBP/NZD                         1.9670

GBP/ZAR                         11.7247

GBP/CHF                         1.2936

GBP/CAD                        1.6149

GBP/SGD                        1.9795

GBP/THB                         49.08

GBP/HKD                        12.8116

red-down; blue-up (snap shot)

These rates are for indication purposes only.

For more information or to get the latest spot rates contact:


John Paul Georgiou

Senior Foreign Exchange Broker

+44 (0) 20 7959 6917      


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