Pound to Euro | Pound Euro Exchange Rate News and Insights

Pound to euro at break-even, today Portugal will be centre of concern for EUR as yields hit record highs

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Category: Pound to Euro

Published on Tuesday, 31 January 2012 10:21

Written by Rob Samson

Concerns over Greece and its debt write-down have led to fears that Portugal may follow suit with the yield on 10-year Portuguese bonds reaching a record high yesterday.

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The pound to euro exchange rate is 0.02% lower on the day with GBPEUR at 1.1954.

The pound to dollar exchange rate is 0.29% higher with GBPUSD at 1.5755.

The euro benefitted from some strong rhetoric yesterday, but Greece and Portugal will be the main concern today.

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Bargaining with Greece over its economic management, and a debt write-down seemed to overshadow the positive aspects of yesterdays summit. The Greek PM Papademos will hope to complete on debt-swap talks with bondholders by the end of this week with the country facing a 14.5 billion euro payment by 20th March.

"Concerns over Greece and its debt write-down have led to fears that Portugal may follow suit with the yield on 10-year Portuguese bonds reaching a record high yesterday. This will again be in focus today," says Richard Driver at Caxton Fx.

Looking at the pound to dollar exchange rate, the pound is currently trading up against its US counterpart as risk appetite increases on euro talks.

Greek PM Papedemos said that there had been significant progress on PSI talks, with the market now anticipating that a restructuring deal on Greek debt may be achievable by the end of the week. There will be no guarantees however, and the market will be reluctant to buy into this rhetoric too far given recent history.

"The pound is also benefitting today from month end selling of the dollar for portfolio adjustments. The upside potential for this pair will be limited however unless there are solid decisions on Greek debt," says Driver.