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Home Forex Check Forex Rate British Pound exchange rates helped by Brown comments
British Pound exchange rates helped by Brown comments PDF Print E-mail
Written by Will Peters   
Thursday, 11 March 2010 10:14
The pound euro exchange rate and the pound dollar exchange rate are both higher in morning trade. Yesterday was a mixed bag for the British Pound: Here is our analysis.



The GBPEUR is higher 0.055% with 1 GBP = 1.0977 EUR.

The GBPUSD is higher 0.033% with 1 GBP = 1.4989 USD.

Yesterday was a day of mixed news and data, it looks though that the British Pound has reached support levels at current value, so any positive news is likely to push the currency higher.

"The Pound declined against the Dollar for the third straight day yesterday, while the UK currency lost ground against 15 out of the 16 most actively traded currencies, adding to declines from the previous session. Sterling is approaching its weakest level against the U.S Dollar in 10 months, after a report showed UK manufacturing unexpectedly contracted in January," says Adam Solomon at business foreign exchange brokers TorFx.
 
The report from the Office of National Statistics showed that factory output fell for the first time in five months, indicating that the sector is struggling to expand following the longest recession on record.

Output was down 0.9% from the previous month, despite initial estimates of 0.2% expansion, and the Pound subsequently fell as much as 0.4% against the Dollar to a low of $1.4875.
 
The 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 bond-purchasing program on hold for a second month, as they assess the strength of the recovery.

But Brown also announced that all senior civil servants would be subject to pay freezes - an announcement that some commentators suggest is a sign that he is willing to make unpopular decisions on the budget deficit.

Mark Deans at MoneyCorp comments that the prime minister's comment about Britain's credit rating, whilst obviously not binding, suggested that he does actually care about it when some thought he did not.

That support was enough to allow sterling to edge higher on the day against everything except the euro and the Swiss franc. Against those it starts this morning half a cent down from yesterday's opening levels.

Pound exchange rates could move lower

The Pound has failed to break back above the key resistance levels at 1.10 versus the Euro and 1.50 against the U.S 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.
 
"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," says Solomon.
 
Last Updated ( Thursday, 11 March 2010 10:15 )
 

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