Weekly Currency Update GBP/EUR - Week ending 19th February
 

Hi all,

The main subject stealing the markets attention has certainly been the continued debate surrounding Greece and other harder hit European countries.

Although the initial reaction was Euro negative the market seems to have settled down with little to no activity seen since then. One of the main reasons for the movements lies behind investors moving funds out of Europe into safe haven currencies like the USD. When large quantities of any currency are sold it can weaken, this normally has a positive effect on the safe haven currencies like the U.S Dollar, Swiss Franc and Gold.

Mervin King (Governor of the BofE) also made a few comments as inflation results showed a rise to 3.5% in January. The rules state that when inflation exceeds 3% the Governor is required to write a letter of explanation to the Chancellor why this has happened considering target is at 2%, what their plans are to bring this back in line. Comments suggest that the huge stimulus package we have in place, plus the effects of VAT changing back to 17.5%, will mean that short term upward inflationary movements are simply “temporary” and we shall see a drop in inflation over the coming months back to target levels.

GBP/EUR movement – High’s & Low’s of last week (15-02-10 to 19-02-10)

High’s: 1.1543
Low's: 1.1357

A movement of 1.64%

Difference on £200,000

High: € 230,860
Low: € 227,140

Difference of: €3720

Whilst FX isn't the most thrilling of subjects, the sooner you begin to think about your money transfers, the more likely you are to make your money go further.



Regards,




Mark Bodega
Director