GBP/EUR June Currency Update
Jul 8th 2010, 12:35 pm
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GBP/EUR June Currency Update
We had the latest snapshot of the UK economic recovery story with inflation receding to 3.4%; though still well above the Bank of England’s target, the employment sector remaining resilient with a drop of 30.9k in the claimant count and retail sales surging by 0.6% in May. However, none of this really had much impact on GBP.
The highlight of the month was the ‘unavoidable’ emergency budget which paved the way for VAT and CGT increases; however there was room to allow for a reduction in the corporation tax. Importantly this was then backed up by the credit rating agencies which stated that it would materially strengthen confidence and the UK’s AAA rating all adding to confidence in the Pound.
The other highlight was the minutes from the Bank of England meeting when rates were left on hold at 0.5%; however the surprise was Andrew Sentence, who voted for a 25bps rate hike adding to speculation the BofE will raise rates this year. Sterling pushed on to a 19 month high as the Euro struggled over ongoing concerns over sovereign debt & the health of the European banking sector.
We saw further signs that a weaker and therefore more competitive EUR is boosting the economy with the IFO reporting the twelfth straight gain in current conditions driven predominantly by a boost in exports. Industrial orders also surged in April by 0.9% adding to the gains of 22.1% from a year ago.
Current Central Bank Rates:
BOE (Bank Of England): 0.5%
ECB (European Central Bank):1.00 %
GBP/EUR Highs & Lows of June:
High: 1.2396
Low: 1.1799
A movement of: 5.06%
Difference this would make on £200k
High: EUR 247,920
Low: EUR 235,980
A difference of €11,940
All of the information above can be explained clearly by your personal dealer should you open a trading facility with HIFX. To discuss your requirements in more detail and for a free currency consultation please contact HiFX plc on 01753 859 159 or email [email protected]
Kind regards,
Mark Bodega
Director - HIFX
The highlight of the month was the ‘unavoidable’ emergency budget which paved the way for VAT and CGT increases; however there was room to allow for a reduction in the corporation tax. Importantly this was then backed up by the credit rating agencies which stated that it would materially strengthen confidence and the UK’s AAA rating all adding to confidence in the Pound.
The other highlight was the minutes from the Bank of England meeting when rates were left on hold at 0.5%; however the surprise was Andrew Sentence, who voted for a 25bps rate hike adding to speculation the BofE will raise rates this year. Sterling pushed on to a 19 month high as the Euro struggled over ongoing concerns over sovereign debt & the health of the European banking sector.
We saw further signs that a weaker and therefore more competitive EUR is boosting the economy with the IFO reporting the twelfth straight gain in current conditions driven predominantly by a boost in exports. Industrial orders also surged in April by 0.9% adding to the gains of 22.1% from a year ago.
Current Central Bank Rates:
BOE (Bank Of England): 0.5%
ECB (European Central Bank):1.00 %
GBP/EUR Highs & Lows of June:
High: 1.2396
Low: 1.1799
A movement of: 5.06%
Difference this would make on £200k
High: EUR 247,920
Low: EUR 235,980
A difference of €11,940
All of the information above can be explained clearly by your personal dealer should you open a trading facility with HIFX. To discuss your requirements in more detail and for a free currency consultation please contact HiFX plc on 01753 859 159 or email [email protected]
Kind regards,
Mark Bodega
Director - HIFX
