Foreign Exchange Report : GBP USD Rate Breaks to 8-Month Low as Investors Scale Back Risk on Poor US Retail Sales Data

15 Sep 2011 at 8 AM - Written by John Cameron

STORY LINK Foreign Exchange Report : GBP USD Rate Breaks to 8-Month Low as Investors Scale Back Risk on Poor US Retail Sales Data

The Pound Euro exchange rate (GBP EUR) is 1.1472. The Pound Dollar exchange rate (GBP USD) is 1.5741. The Pound Australian Dollar exchange rate (GBP AUD) is 1.5424.

The Euro continued to stabilise in the currency markets during yesterday’s session following a concerted effort by Eurozone policy-makers to emphasise their ongoing commitment to Greece.

Reports emerged of a conversation between Greek Prime Minister George Papandreou and his German and French counterparts Angela Merkel and Nicolas Sarkozy. A Greek government spokesman staed that the talks had re-affirmed Greece’s position as an ‘integral part’ of the Eurozone, scotching market rumours earlier in the week that Eurozone states, including Germany, were manoeuvring Greece’s exit from the Euro.

Chancellor Merkel and President Sarkozy issued a separate statement observing that Greece was keeping to the conditions of its bail-out package and was currently well-positioned to receive future tranches of emergency funding.

Europe’s single currency was further buoyed by a statement from EU President Jose Manuel Barroso stating that he would place pressure on EU nation states to start issuing joint Eurozone bonds, a measure which has been championed by legendary investor George Soros in recent months. The market generally responds well to a collective response to a crisis and talk of using the ’Eurobond’ solution to assuage Europe’s current debt crisis was no exception, with the GBP EUR rate hitting its lowest level in a week during the session to briefly touch 1.1308.

Elsewhere, yesterday afternoon saw the release of a poor set of US Retail Sales figures for August. The figures showed that American shop sales showed no growth last month. The US Commerce Department data also downwardly revised July’s counterpart figure from 0.5% to 0.3%. Analysts had expected August’s number to show a slight increase of 0.2%, however the worse-than-anticipated failed to dent the US Dollar, which consolidated its position against the Pound and the Euro on the session as investors scaled back their appetite for risk, sending the GBP USD rate to an 8-month low of 1.5706


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