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Home Forex Check Forex Rate Pound exchange rates mixed on Monday morning
Pound exchange rates mixed on Monday morning PDF Print E-mail
Written by Sam Coventry   
Monday, 15 March 2010 10:04
The pound euro exchange rate is higher, while the pound dollar exchange rate has come in lower in morning trade in London.



The GBPEUR is 0.099% higher with 1 GBP = 1.1039 EUR.

The GBPUSD is lower by 0.046% with 1 GBP = 1.5165 USD.

As always the Monday morning exchange rate market takes direction from the pre-ceding week.

This is where we stand:

"Following on from last week, the British Pound declined against the Dollar for three straight days last week, while the UK currency lost ground against 15 out of the 16 most actively traded currencies, adding to declines from the previous week. Sterling is approaching its weakest level against the US Dollar in 10 months, after a report showed UK manufacturing unexpectedly contracted in January," reports Adam Solomon from business foreign exchange brokers TORfx.

US Dollar pressures


The US dollar took a hit against the pound on Friday, as strong US data benefitted perceived riskier currencies like the pound.

US retail figures were up higher than expected at 0.8%, much higher than the 0.1% predicted.

The strong numbers have further confirmed analyst's belief that the world's largest economy was continuing to recover and the global economy would follow suit. This led to the US dollar being sold for European currencies on Friday as riskier assets were bought up.

Also bringing the dollar down were rumours that US President Barack Obama was planning to appoint Janet Yellen to Fed Vice-Chairman. She is currently the San Francisco Reserve Bank Chief and is widely seen as cautious.

On the domestic front Prime Minister Gordon Brown has warned that the nation's recovery will be far from smooth of the coming months but vowed that "we will weather the storm together."

Bank of England officials last week decided to keep the £200 billion bond-purchasing program on hold for a second month, as they assess the strength of the recovery.
 
BoE member Kate Barker also said last week that the UK faces a "bumpy" recovery and manufacturers haven't yet benefited from the drop in the value of the Pound.

Sterling has fallen roughly 25% in the past three years on a trade weighted basis but the latest trade balance shows that the deficit is widening with exports down 6.9%.
 
Policy makers are divided on whether additional stimulus may be necessary to cement the recovery and prevent a relapse. David Tinsley, an economist at National Australia Bank and a former MPC official, said that "until the recovery in the Euro-zone gets more entrenched, the outlook for manufacturing is going to be fairly heavy weather. It's possible UK gross domestic product will be weak or a bit negative in the first quarter."
 
"The British Pound has failed to break back above the key resistance levels at 1.10 versus the Euro and 1.50 against the US Dollar, indicating that a move lower is increasingly likely. The UK currency declined heavily on Tuesday, after Fitch Ratings said that Britain is taking too long to cut its budget deficit and may be susceptible to a downgrade in its credit rating from top level status," says Solomon.
 
Concern over the UK elections have also weighed heavily on Sterling, amid speculation that Britain may have its first minority government since 1974.

A hung parliament would make it extremely difficult for officials to cut the ever-widening budget deficit, currently above 12% of gross domestic product.
Last Updated ( Monday, 15 March 2010 10:07 )
 

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