Weekly Currency Update GBP/EUR - Week ending 22nd October
Oct 26th 2010, 11:15 am
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Weekly Currency Update GBP/EUR - Week ending 22nd October
Last week Sterling remained under pressure as the BoE meeting minutes and the public spending cuts were announced.
The minutes came first and unveiled a three way split among the MPC members, with Sentance and Posen the outliers. Andrew Sentance voted for a 25bps rate hike and Adam Posen took the contrary view of voting for an extra £50bn injection of quantitative easing.
And then we had the announcement of the public spending cuts, which considering the plan to cut £81bn by 2014/2015, went pretty smoothly.
Although Sterling remains sensitive to the prospect and impact of these cuts, the news was taken positively by the credit rating agencies and also it is interesting to note that the yield on the 5-year Gilt dropped below its German counterpart, which certainly helps the Government in its plans to reduce the deficit as the cost to funding the debt alone last year amounted to £44bn!
Sterling, having fallen from grace and the recent 1.20 level seems a long way away, this after Sterling notched up a new low last week at
1.1230.
GBP/EUR movement – High’s & Low’s of last week (18th October– 22nd October)
High’s: 1. 1489
Low's: 1. 1216
A movement of 2.34%
Difference on £200,000
High: EUR 229,780
Low: EUR 224,320
Difference of: EUR 5,458
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 - HiFX
The minutes came first and unveiled a three way split among the MPC members, with Sentance and Posen the outliers. Andrew Sentance voted for a 25bps rate hike and Adam Posen took the contrary view of voting for an extra £50bn injection of quantitative easing.
And then we had the announcement of the public spending cuts, which considering the plan to cut £81bn by 2014/2015, went pretty smoothly.
Although Sterling remains sensitive to the prospect and impact of these cuts, the news was taken positively by the credit rating agencies and also it is interesting to note that the yield on the 5-year Gilt dropped below its German counterpart, which certainly helps the Government in its plans to reduce the deficit as the cost to funding the debt alone last year amounted to £44bn!
Sterling, having fallen from grace and the recent 1.20 level seems a long way away, this after Sterling notched up a new low last week at
1.1230.
GBP/EUR movement – High’s & Low’s of last week (18th October– 22nd October)
High’s: 1. 1489
Low's: 1. 1216
A movement of 2.34%
Difference on £200,000
High: EUR 229,780
Low: EUR 224,320
Difference of: EUR 5,458
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 - HiFX
