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Home Forex Check Forex Rate Pound Euro exchange rate: UK currency was oversold
Pound Euro exchange rate: UK currency was oversold PDF Print E-mail
Written by Will Peters   
Wednesday, 17 March 2010 09:49
The Pound Euro exchange rate is lower in morning trade in London, however the British Pound has clawed back some ground over the course of the past 24 hours.



The GBPEUR is lower by 0.152% at 9am in London. 1 GBP = 1.1052 EUR.

"Having leaned hard on the pound sterling ahead of London's opening investors quickly came to the conclusion that a re-run of Monday morning's raid on pound sterling would be overdoing it," reports Mark Deans at MoneyCorp.

Deans has a strong argument that the British Pound has been oversold in trade earlier in the week. But once again a look at foreign exchange rate market analysis reveals more talk of opinion polls.

Indeed analysts are once again using opinion polls as an explanation for movement in sterling, this time supporting a rise of 0.6% against the euro.

A new poll indicating a stronger Conservative lead triggered a round of short covering which helped the pound to recover from early losses.

Investors know full well that the opinion polls are continually oscillating on the size of the Conservative lead. A clear lack of detail on how the party would deal with the deficit also questions the use of opinion polls as an explanation for sterling performance.

Nevertheless, it remains the flavour of the month for currency analysts to focus on the opinion polls, and of course, perception is reality.

More substantive backing for the British Pound came on the back of a robust UK housing data from the Department of Communities and Local Government, which revealed a 6.2% year-on-year rise in prices in January.

Guiding the Euro was news it has been decided that aid to Greece would probably come through governments pooling funds to extend direct loans. However the meeting failed to resolve the size of future loans, which countries would offer them or how long they would last and cost.

In Germany, an economic confidence index dropped for a sixth month amid signs the economy is struggling to expand as Greece's fiscal woes shake financial markets, which put added pressure on the single currency.

The market today will look to the minutes of the latest BoE meeting, due out at 09:30, which are expected to show a decision to leave policy unchanged was unanimous.

Unemployment figures are also due in the UK at the same time, and currently sterling is trading slightly lower with caution in the markets ahead of the data.
Last Updated ( Wednesday, 17 March 2010 09:51 )
 

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