Pound Euro Exchange Rates ? GBP/USD Breaks Down Through 1.6000 While Euro Enjoys Support as do AUD, NZD, ZAR

Published: Tuesday, 15 March 2011 14:40 BST - Written by John Cameron

STORY LINK Pound Euro Exchange Rates ? GBP/USD Breaks Down Through 1.6000 While Euro Enjoys Support as do AUD, NZD, ZAR

The Pound Dollar exchange rate (GBP/USD) is 1.6040. The Pound Euro exchange rate is 1.1506.

European stock markets have followed Asian markets’ lead and have plummeted during today’s session. The losses are attributable to fears that a rapid contraction in Japanese growth, following last week’s devastating earthquake, will affect the demand for components and products across world markets. The FTSE 100 is down by over 2% on the day, whilst the broader-based FTSE 250 index has lost almost 3% as mid-cap companies suffer the effects of the Japanese crisis.

In mainland Europe, the DAX index in Frankfurt is down by almost 5%, reflecting Germany’s status as a key supply-chain partner for many Japanese multi-nationals. Meanwhile, Paris’s Cac 40 has lost nearly 4%.

Turning to economic data releases, some extremely concerning housing sector figures were released by the Department for Communities and Local Government in the UK earlier today. The numbers showed that UK house prices fell by 1.4% from the month before. This figure has heaped downward pressure on the Pound and caused it to re-visit and this time break through the four month low which it reached against the Euro yesterday. A close below 1.1500 on GBP/EUR would send out a massively bearish signal for GBP/EUR in the near-term.

Tomorrow’s jobless claims figure for February will be closely watched by analysts, but the figure will have to be significantly better than the expected 1,300 figure in order arrest Sterling’s current downtrend against the majors. 1.6000 remains a key level for the Pound against the US Dollar, as does 1.1500 for GBP/EUR.

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