Daily Archives: June 8, 2011
This morning the pound fell to a low of 1.1138 against the Euro. The Monetary Policy Committee (MPC) gathers tomorrow, which should make for an interesting meeting. Ben Broadbent replaces Andrew Sentance who although somewhat of an unknown, is reportedly more dovish than his predecessor, and this should have a big impact on where the pound will be heading. Should the MPC take a more dovish stance, as expected, then sterling exchange rates could suffer, particularly against the Euro as even this week Jean Claude Trichet is expected to give the signal, probably using his favourite code word “vigilant”, that a hike may happen in July.
The general mood is that UK interest rates don’t appear to be going up any time soon, and probably not until 2012, so sterling is going to be on the back foot. In direct contrast with the European Central Bank, that puts pressure on Sterling Euro exchange rates.
For anyone with a Euro currency requirement, there are a number of European releases to watch out for. EU GDP numbers are at 10 a.m., with 0.8% growth expected. German industrial figures are released at 11 a.m. Strong GDP could lend support to the Euro in the run up to the European Central Bank (ECB) decision this Thursday. With the pound already falling to 4 week lows if interest rate decisions go against the pound we could be back down in the 1.10′s very soon.