1.27: Best Pound to Euro Exchange Rate in Two Years Hangs on in Foreign Exchange Markets

September 21, 2014 - Written by David Woodsmith

STORY LINK 1.27: Best Pound to Euro Exchange Rate in Two Years Hangs on in Foreign Exchange Markets

The British Pound Sterling exchange rate complex (GBP) pushed for further gains versus the Euro (EUR) and the US Dollar (USD) last Friday, as the outcome of cooled fears from forex investors about a major shakeup for Sterling.

The Eurozone has felt disappointment as its recovery continues to be fragile, and banks have rejected the latest European Central Bank (ECB) measures.

The latest conversion rates as of today, 22nd September 2014 at 11AM GMT:

- The pound to euro exchange rate converts as 1 GBP equals 1.27111 EUR.
- The euro to australian dollar exchange rate is 0.8 per cent higher at 1.44786.
- The euro to pound exchange rate is 0.07 per cent lower at 0.78672.
- The euro to dollar exchange rate is 0.1 per cent higher at 1.28523.

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Scottish Referendum Causes Fragile Trading for Pound Sterling

The Pound has seen a vast amount of movement in the latter few weeks as the Scottish referendum has drawn closer. However; the day of the announcement has also seen highs and lows for Sterling.

It appeared the Pound would remain stable throughout the decision; on the day of voting, the Pound began to make gains against other majors as the general consensus spread through the UK that the ‘No’ party was likely to be crowned the winners.

Furthermore, bookmaker Betfair began to pay out to those customers that had chosen to support the ‘No’ vote. Betfair commented: ‘Thanks to the accuracy of the data available on our exchange, we’ve decided that “No” is the most likely outcome.’ Confidence Scotland would remain within the UK allowed investors confidence to rise and the Pound saw steady gains.

However, on Friday the day of the announcement, the Pound initially started to advance against other majors, appreciating by 0.3% against all other 31 major currencies.

In a slightly surprising turn, the last half of Friday’s European session saw Sterling dip lower against many majors such as the US Dollar (USD). The ‘Greenback’ has recently placed pressure on both the Euro and the Pound, as the Federal Reserve begins to discuss interest rate hikes more openly.

Now, the ‘Buck’ is destined to undertake its longest rally since 1967 as it’s risen for its tenth straight week. Forex expert Douglas Borthwick commented: ‘It tells you the Dollar has been so depressed over the last few years and now that depression is unwinding, like a coiled spring.’

Political Aftermath could cause Movement in Dollar and Euro Conversion Rates

In the aftermath of the Scottish referendum political conduct in the UK will be changed forever. The offers the government made whilst trying to keep the United Kingdom together will cause a large change in the way politics are managed in future.

Scotland’s First Minister, Alexander Salmond has resigned, following the failure of his ‘Yes’ campaign, and UK Prime Minister David Cameron has offered Scotland a devolved parliament.

Although it can only be speculated upon regarding what the next steps for the UK government will be, the one thing that’s for certain is that political conduct is about to undergo reform. Cameron has stated on Friday that he wishes for more equality in the government, with only English MP’s allowed to vote on English matters, meaning left wing Scottish members of parliament losing their say in English matters.

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TAGS: Pound Euro Forecasts