UK Interest Rates On Hold – GBP Exchange Rates
As predicted on this currency report yesterday, the Bank of England (BoE) kept both interest rates and their Quantitative Easing (QE) programme on hold meaning we are faced with yet another month of record low interest rates. Despite this news being expected, following the announcement we actually saw Sterling weaken against the Euro falling below the key 1.21 level presenting some better opportunities for clients that are looking to sell EUR. This morning the movement seen yesterday in the exchange rates has been compounded by the news that German inflation data shown no change and that Greek bonds were over subscribed by 8 times which compared to 18 months ago when no one was taking up their bonds is a very positive sign. So, as a result of this we have seen the exchange rates fall further and with very little economic data due out today for either the Eurzone of the UK the current downward trend may be set to continue further.
USD Exchange Rates
The main economic data for today is in the US with their latest set of Production figures due this afternoon. Currently Sterling is at some very strong levels against the Dollar mainly following comments that stated the improved economic projections for the US had been overstated which weakened the Dollar and has seen rates shoot up towards the 1.68 mark which is some of the highest levels we have seen for quite some time. This afternoon’s figures are predicted to come out better than expected which could provide the USD with some much needed strength meaning we may not see these current high levels last much longer.