British Pound Sterling | Currency News Views and Outlook
British Pound Sterling: Currency softens vs EUR slightly at the start of a crucial week
- Details
- Category: British Pound Sterling
- Published on Monday, 03 October 2011 09:18
- Written by Rob Samson
The markets will inevitably begin placing bets on whether we will see a rate cut from the ECB on Thursday. The Bank of England could also expand quantitative easing.
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The pound dollar exchange rate is 0.742% lower with 1 GBP = 1.5508 USD.
The pound Australian dollar exchange rate is 0.208% higher with 1 GBP = 1.6132 AUD.
Friday saw the single currency weaken off sharply amid disappointing German retail sales data and generally weak investor sentiment.
The British Pound Sterling had a far stronger day amid talk of some very large EU subsidy payments to the UK.
"This week is a hugely important one, with the ECB and the Bank of England’s meetings on Thursday representing the major highlights. The sector-by-sector UK growth figures will also attract attention, with today’s first instalment in the form of manufacturing PMI data providing a pleasant upside surprise," says an exchange rate note from Caxton FX.
Comments from the ECB indicating that it is unrealistic to expect the bailout fund to be increased helped to ensure a poor end to the week for the single currency.
The markets will inevitably begin placing bets on whether we will see a rate cut from the ECB on Thursday. There have been no real indications that the move will be made but there is still a significant chance. This is Trichet’s final meeting in charge of the ECB, and it may be that he will hold off and let his successor make the policy u-turn.
The pound euro pair is now trading at €1.1650, a reflection of the waning confidence in EU action on the debt crisis. Data from the UK manufacturing sector revealed there was no third consecutive month of contraction in September. Bets on a QE announcement at Thursday’s MPC meeting may reduce slightly as a result, but data over the next couple of days will also be vital.
