March 10, 2011 - Written by John Cameron
STORY LINK Pound Euro Exchange Rates ? GBP/EUR Trades Up While EUR and AUD Lose Ground
The Pound Dollar exchange rate (GBP/USD) is 1.6088. The Pound Euro exchange rate (GBP/EUR) is 1.1643 .
The Bank of England Monetary Policy Committee voted to maintain interest rates at their current record low level of 0.50% earlier today, in line with analysts’ expectations.
The announcement had little effect on relative levels of the Pound, even though futures markets had been predicting a 15% chance of a rate rise. The reason that Sterling did not lose ground may be because potential losses caused by the release have been off-set by extremely encouraging manufacturing sector data released earlier today. These figures showed that Britain’s manufacturing base grew by its fastest annual rate for more than 16 years in January.
Elsewhere, the Reserve Bank of New Zealand cut interest rates from 3.00% to 2.50% overnight. Other things being equal, this action would be expected to significantly weaken the Kiwi Dollar, but the move was so widely anticipated that the GBP/NZD has moved downwards on the day to currently trade back below the 2.2000 level at 2.1940.
The pick of a slew of Eueozone economic numbers released earlier today was the German Trade Balance figure for January, which was disappointingly weak.
Turning to the Euro, sovereign debt issues continue to weigh down the single currency. All bets are off with little in the way of risk event until tomorrow’s ECB Debt Summit. GBP/EUR has traded as high as 1.1718 during today’s session. This level was immediately rejected and with the Bank of England announcement proving to be a damp squib, the pair looks likely to trade between the 1.1600 and 1.1700 levels where it has spent the majority of the last 2 weeks.
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