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It’s a great time to be buying Euro’s/USD with Sterling

As Sterling  continues to perform well it might just be the right time to look at buying Euros and USD for purchases, transfers or travel!

GBP £

Despite a dip in risk appetite brought about by the poor US data releases and deeper Eurozone concerns, Sterling performed well against both the Euro and USD hitting 20 month and 5 month highs respectively. There is a real concern that the Q1 GDP release next week will show that Britain has fallen back into recession making this data, released next Wednesday, very important to the short term performance of the UK currency.

This fear increases despite MPC member Adam Posen announcing his change in stance on last year. Mr Posen now believes that the overall concerns surrounding a sharp deterioration in economic conditions have dramatically reduced, this, however, is not to say things cannot still get worse, it’s simply that if they do, it will be at a manageable rate.

Adam Posen also noted that the GDP data to be released would not be a true representation of the current economic standing, with the bigger picture much more positive. It is expected Sterling will maintain its defensive role, despite potential unease over the effect the banking sector crisis in Europe could have on British banks.

USD $

We had a very busy day of data releases in the US, starting with a weaker than expected jobless figure, for the second reading in a row. The 388,000 figure released is the highest since January.

More weak data announced as home sales fell year-on-year from 4.60m to 4.48m and the Philadelphia Fed index fell to 8.5 for April from 12.5, also the weakest number since January.

This had a negative impact on risk appetite which provided some USD support despite the poor data releases, although this failed to prevent cable from breaking, and holding, through 1.60, there was also further speculation of extra QE.

EUR €

The Euro held firm against the USD on Thursday, with support remaining around 1.3100 for the third day running. Extra support was found early in trading in the build up to the much hyped Spanish bond auction owing to the expected demand for the bonds.

A rally never materialised, despite the demand, as the auction was too small, meaning a high demand was expected. Spain had to pay a higher yield on 10 yr bonds, up at 5.74%, however, a level below 6% will prevent another fire sale of European assets. France was back in the headlines for reasons other than the upcoming election with rumours of a possible credit rating downgrade; fears also increased surrounding the performance of the Spanish banking sector.

Underlying confidence fragility when the IMF announced that the current debt situation in Italy and Spain is unsustainable in the medium term, despite projections from both governments that were clearly politically motivated to improve confidence.


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Morning Market Rates: (Please note: These are indication prices only, they are not offer rates)

GBP/USD: 1.6010

GBP/EUR: 1.2151

GBP/AUD: 1.5464

GBP/CHF: 1.4612

GBP/ZAR: 12.449

GBP/JPY: 129.12

USD/JPY: 79.565

USD/ZAR: 7.7779

EUR/USD: 1.3112

EUR/ZAR: 10.234

GBP/NZD: 1.9686

GBP/CAD: 1.5932

GBP/AED: 5.8875

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