GBP/EUR rates have spiked back up during Wednesday’s trading, following a loss on the exchange yesterday. The Pound dipped by almost 2 cents yesterday and once again the markets indicated we may finally be seeing some respite for the EUR, following a very testing few months. However, it now seems no more than another false dawn with GBP/EUR rates moving back through 1.43.
This is not the first time the EUR has threatened a realignment over recent weeks and although the single currency is showing no immediate signs of a major turnaround, it doesn’t mean EUR sellers cannot find short-term opportunities to sell at better prices, yesterday’s movement being a prime example.
With Bank of England (BoE) Mark Carney being particularly bullish about the UK recovery at present, even alluding to the fact that UK interest rates may rise sooner than most expect, Sterling is finding plenty of support in the market. Add to this the on-going debacle in Greece and it is not hard to see why we are at some of the best levels seen on GBP/EUR over the past 8 years.
A cautionary word would be that this is not the first time Carney has talked up a rate rise, only to dash the markets hopes the following month. It may well be that he follows suit again, as I personally cannot see the BoE raising rates sunlit at least the second quarter of 2016 at the earliest. With a new deal now in place between Greece and its creditors we may find these eases pressure on the EUR and I do feel the EUR is likely to find some support sooner rather than later.
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