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Pound falls versus Euro for third day

We saw another poor day for Sterling yesterday as it weakened for the third consecutive day against the Euro.
It opened yesterday morning sitting around 1.1360 but closed the U.K session just above 1.1300. Once again the reason for this is market concern over slowing economic growth and the perception that this will deter the MPC from raising interest rates. So far this year we have seen a fall of about 3% for Sterling against the Euro. In the short term the longer the markets believe that interest rates will be left at 0.5% then Sterling will struggle to make any significant gains. The pound managed to hold its own against the dollar yesterday but that was the one ray of sunshine in a day where we saw falls right across the board losing as an example 1% against both the Norwegian Kroner and the South African Rand. Today sees Services PMI released at 9.30am ( this is a leading indicator of economic health )  and the markets will look to see if they can find some light at the end of the tunnel.
DATA : 9.30am Services PMI


Euro: .
Another positive day for the Euro yesterday as it made gains right across the board. At the moment it seems to be able to bat away any bad news that the PIGS throw at it (Portugal, Ireland , Greece and Spain ) and contin-ues to prosper against its peers. The euro reacted positively to comments from German Chancellor Angela Merkel who was reported as saying that the E.U. remains committed to its shared currency and the outlook for German growth is very positive. The markets believe that European leaders will slowly, but surely,  find a way out of the debt problem and save the Euro. Greece might well have to roll over its debt and that could work even though pushing the burden to the next generation is not ideal. The economic outlook for the region remains positive overall and interest rates are likely to rise further.
DATA : No Major Data Today

The markets will be focused on the States today to see if they can deliver some positive employment figures. We have seen a string of disappointing reports on the economy over the last few weeks but the only positive in the past months has been solid and steady job creation in the private sector. However if the figures disappoint, particularly if job creation skids to fewer than 100k positions added ( the market expects about 174k added ) then this would deflate remaining optimism that the economy is in a solid and self-sustaining expansion.  Some in the market believe that today's figure will disappoint  and therefore the recovery from both the jobs perspec¬tive and the broader perspective is pretty lacklustre.                                          

DATA 1.30pm Non-farm Employment Change

The Aussie began Friday’s session on a positive note after recovering nearly 60 pips on Thursday, bouncing from lows below 1.0590. It climbed as high as 1.0715 in the  Asian session before meeting selling pressure and is now pulling back from these highs.


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GBP/USD 1.6335
GBP/EUR 1.1290
EUR/USD 1.4475
GBP/JPY 131.90


GBP/NZD 2.0090
GBP/ZAR 10.958


GBP/CAD 1.5985
GBP/SGD 2.0160


GBP/USD 1.6335
GBP/EUR 1.1359
EUR/USD 1.4377
GBP/JPY 132.26


GBP/NZD 2.0063
GBP/ZAR 11.1600


GBP/CAD 1.5973
GBP/SGD 2.0201

ed-down; blue-up (snap shot)

These rates are for indication purposes only.

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John Paul Georgiou

Senior Foreign Exchange Broker

+44 (0) 20 7959 6917


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