GBP Rates Remain Steady

GBP exchange rates have remained steady this morning following strong gains posted yesterday in what proved to be an extremely volatile day. The pound had a poor start following lower than expected PMI data in the morning leading the GBP/EUR hitting 13 month lows, many had expected this trend to continue following the Bank of England and ECB’s interest rate decision. As expected both central banks held base rates at 0.5% and 1.25% respectively, this lead to little movement but the post decision conference held by Jean Claude Trichet was the market mover.

Many had expected strong hints from the Mr Trichet with regards future monetary policy however his comments were interpreted rather differently and analysts now believe a rate hike in June to be unlikely. This subsequently caused a significant Euro sell off with losses of 1% against the pound and 1.5% against the dollar. This has created some unexpected buying opportunities particularly as far as GBP/EUR is concerned.