Does anyone know what's occurring with the £/€ exchange rate - after months of 1.21/1.22 it has tumbled to 1.17 in the last few days. Usually when this happens you can work out quickly from the news what has caused it but all I can see is "UK growth rate slower than expected" which I would expect to have the opposite effect.

As you can tell I don't know much about this stuff :-) but I am curious - as we earn from the UK it has quite an impact on us month to month


B

Sometimes it baffles me what they markets get up to, but I think that they are nervous about what cuts are going to be made by the government next month. If they are severe (someone will correct me if I am wrong), then the pound will take a dive again, but I don't think it will go down as low as 1 for 1. Of course I might well be proved wrong and it will go the other way.
Also you have to look and see what is going on in the main part of Europe. Whilst Spain, Greece (now recovering) and Portugal are still being hit hard, the rest of Europe seems to be doing okay (especially Germany and France), so the more confidence there is in Europe the less well the pound will do as everyone wants to buy euros and not pounds.
However, the pound has been slowly dropping over the last month from a high of 1.23 now down to 1.17 (on the big markets), so less on the markets that we use to do our exchange.
Lets wait and see
Joao

reuters website gives good info on currency fluctutions.

Quote from today's Halo Financial daily newsletter:
Sterling had a very bad day at the office.
The Bank of England minutes showed the expected mix of 8 committee members voting for status quo on interest rates while Andrew Sentence called for a pre-emptive hike but that wasn’t what weakened the Pound.
The Monetary Policy Committee, like the Federal Reserve, has shifted towards suggesting further fiscal stimulus is likely and that had the same effect on Sterling as the Fed’s comments had on the US Dollar.
One member tried to decry the view that the BOE had gone soft on inflation but the evidence of years of above target inflation and little evidence of measures to control it are hard to argue against.
Weakness across the board has pulled the Pound 6 cents lower against the Euro than it was just a week ago but it still managed to make minor gains against the US Dollar.

I received the following email, over 1 week ago from my currency exchange manager

Good Afternoon,
Apologies if I have spoken to you recently but as your account manager I believe it is important to keep you up to speed with the currency market movements.
The Pound has made minor losses of late against the vast majority of major currencies, which unfortunately I would not be surprised to see continue in the coming months. There are huge public spending cuts planned to be announced shortly and large public sector walk outs already being discussed. All of which could significantly weaken the pound in a similar way as we saw last year, of over 5 cents.
Obviously there are many underlying problems globally including the likely double dip recession in the U.S, and the “PIGS” of Europe. Both have not been in the national media lately but I’m sure their problems are far from resolved. The problem with the U.S entering a double dip recession is that the UK often follows, hence the saying “when the U.S sneezes the U.K catches a cold.”
The markets also move on rumour as well as fact so they may well move well in advance of this happening potentially weakening the pound.
If you have a currency requirement no matter how large or small, either imminently or for the future it is imperative you let me know either by calling in or replying directly to this email so I can keep you up to date with exactly what is going on.
In the meantime I hope you are well and I look forward to speaking with you soon.

The Fed has decided to print more money trying to kick-start the economy. Currency traders don't like this sort of thing and the dollar tumbled against the Euro. Similar noises have been detected coming from the UK, so the pound followed the dollar.

The same thing happened when the Fed and then the UK decided to print money a while ago.

The good thing about it is that it doesn't tend to last. I'd expect the pound to recover within months.

One thing to watch is Portugal. If they can't agree a budget for 2011, there'll be a full-blown crisis. In this case, the Euro is bound to fall.

http://money.uk.msn.com/investing/ar...4854675#uc2Lst

We use Xe.com but the old heart still gives a flutter when big money is in transit. When you are not even certain about banks who do you trust these days ?

Actually, big banks have never been safer. It's been proven that they'll be bailed out at any cost, Ireland being the latest and greatest example.