Daily Archives: June 9, 2011
Pound Sterling Forecast is expecting the interest rate decisions today to be pretty much a non-event although the unexpected can always occur. The rate decision for both UK and Europe being announced at midday and 12:45pm respectively. No change is expected for both economies but the chance of a rate hike is higher in Europe especially following the announcement that Euro Zone Gross Domestic Product (a figure considered to be a measure of an economy) has increased from 0.3% to 0.8%. Attention will also be being paid to Jean Claude-Trichet comments following the meeting which may highlight if there will be further rate hikes in the coming months.
At present the pound is back up to 1.1240 against the EURO and 1.6432 to the USD.
Yesterday Moody’s credit rating agency warning that the UK’s AAA rating could be at risk if the government miss its debt reduction target. I expect to see further unannounced comments like this to arise in the future. We never know when comments like this will come out but you often find that they can cause great volatility to the markets. Yesterday the pound did weaken by over 0.5% against a host of currencies on the back of the comments. So should the UK not cut its deficit then expect more negative comments to come from Moody’s and with it a short term weakening of the pound.
If you have any questions or queries regarding rates of exchanges for any currency pair please email me directly on email@example.com with your contact details and we can have a chat about the outlook.