GBP falls, risk aversion knocks demand
Tuesday, 15 March 2011 13:36
GBP to EUR in fourth successive day of falls.
The GBP to EUR rate is 0.216% lower on the day with 1 GBP = 1.1537 EUR.
Today sees the fourth straight day of declines for GBP to EUR.
The rate was seen dropping to a low of 1.1505 yesterday as money markets continue to scale back expectations that the Bank of England will raise interest rates.
The Euro also made strong gains against the majority of the 16 most actively traded currencies, as European Union finance ministers announced a deal to effectively bring a halt to the sovereign debt crisis.
With Europe poised to raise its benchmark lending rate in April, some peripheral economies are still struggling with recession, but news of the revamped bailout plan will be a source of encouragement to investors.
GBP was 0.3% lower against the Euro by midday in London and the UK currency may come under further selling pressure after falling through support at 1.1550.
Yesterday GBP to USD bounced back strongly, rising back towards 1.62 by the close of trading last night, as Fitch Ratings agency said that the UK should retain its top-rated credit rating.
The government's efforts to reduce the budget deficit have drawn worldwide acclaim, even though the extent of the cuts have increased unemployment and weighed on consumer spending.
UK government bonds rose for a third day in a row, as investors reduced bets that the Bank of England will raise interest rates over the coming months. Fitch Ratings said that the "principal risk" to the UK's credit rating is a weaker-than-expected economic recovery, though that's not "sufficiently material" to threaten the UK's AAA credit rating.
GBP to EUR: Latest News
- GBP to EUR finally decides to wake up as risk-rebound goes into overdrive in afternoon session
- GBP to EUR: Uneventful market conditions continue! Currency pair virtually unchanged from yesterday
- GBP to EUR technicals: Things are starting to look heavy for the EUR again
- GBP to EUR in strong advances as a dovish ECB session looms, latest PMI data does not help either
- The GBP to EUR is a bright spot on a day when markets are showing a renewed sense of fear on the Eurozone outlook
- GBP to EUR technicals: 0.8500 level held firm and the EUR failed at its first major hurdle
- Technical outlook for the GBP to EUR exchange rate: Go short on the breaking of 0.8315 for EURGBP say RBS
"These levels, and slightly higher ones in EUR/GBP, should make excellent GBP buying opportunities." Read More....
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