Pounds to Euro Exchange Rate Today - GBP USD Tests Lower as Moody’s Threatens European Credit Downgrades While GBP CHF Gains

13 Dec 2011 at 9 AM - Written by Tim Boyer

STORY LINK Pounds to Euro Exchange Rate Today - GBP USD Tests Lower as Moody’s Threatens European Credit Downgrades While GBP CHF Gains

The Pound Euro exchange rate (GBP EUR) is 1.1828. The Pound Dollar exchange rate (GBP USD) is 1.5588. The Pound Australian Dollar exchange rate (GBP AUD) is 1.5449.

Yesterday’s session in the currency markets was marked by a pronounced move against the Euro by investors. The move was largely driven by a report from leading credit ratings agency Moody’s, which re-iterated that it was reviewing the ratings of all of Europe’s major economies due to "continued absence of decisive policy measures", following last week’s debt summit in Brussels.

Meanwhile, the Pound performed solidly on the day, as market participants placed concerns about the potential isolation of the UK in Europe to the backs of their minds, following Prime Minister David Cameron’s action to veto treaty alteration discussions of last week.

Several British business leaders spoke out yesterday warning that the UK’s best interests had not been served by the Prime Minister’s actions, but this did not stop the GBP EUR exchange rate spiral to a new 9-month high of 1.1846 overnight. The pair first broke the key psychological level of 1.1800 in the middle part of yesterday afternoon’s session. The fact that it has remained above this level provides a bullish indicator moving forward.

Elsewhere, Switzerland’s administration has this morning become the latest global government to significantly cut its growth forecast for 2012, as worldwide austerity measures start to take a have an adverse effect on economic activity. Swiss policy-makers announced that they are slashing their growth forecast from 0.9% to 0.5% for next year. So far, the Swiss announcement has failed to significantly diminish appetite for risk amongst investors, with major European stock indices opening up on the session. However, risk aversion may come into play as the day progresses, benefitting the USD and causing the GBP USD exchange rate to make a renewed run at yesterday’s low of 1.5537.


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