Foreign Exchange Insight : Comments by ECB Policy-Makers Send GBP EUR Rate Higher

May 27, 2011 - Written by John Cameron

STORY LINK Foreign Exchange Insight : Comments by ECB Policy-Makers Send GBP EUR Rate Higher

The Pound Euro exchange rate (GBP EUR) is 1.1544. The Pound Dollar exchange rate (GBP USD) is 1.6444. The Pound Australian Dollar exchange rate (GBP AUD) is 1.5382.

The Euro experienced significant volatility late on yesterday, as several European policy-makers commented on the ongoing Eurozone sovereign debt crisis.

ECB Board Member Lorezo Bini Smaghi warned that Eurozone states which failed to keep to the terms of their emergency bail-out plans would be at risk of losing their ECB funding, effectively plunging them into the economic abyss.

In a separate speech, another ECB Board Member, Jose Manuel González Paramo, observed that European banks are overly-dependent on the ECB to provide them with liquidity. He went on to suggest that this position was not tenable in the medium-to-long term.

Meanwhile, Professor of Economics at New York University's Stern School of Business,
Nouriel Roubini, added his opinion, describing recent statements by ECB policy-makers predicting a dramatic sell-off for the Euro if Greece defaulted as, ‘utter nonsense’. He added that the comments risked a run on Greek banks.

On the other side of the Atlantic, the US Dollar experienced heavy selling pressure at the start of yesterday’s North American session, following the release of highly disappointing Q1 GDP Growth figures which showed that the US economy grew by only 1.8% in the first three months of 2011, versus analysts’ expectations of an increase in economic activity of 2.2%.

The negative US Growth figure was compounded by a weak Q1 US Personal Consumption figure. The combined effect of these disappointing US data releases was to push the GBP USD exchange rate above 1.6400 for the first time since 11th May during overnight trading.


For other live currency exchange rates and a currency converter see the currency news website.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: American Dollar Forecasts Daily Currency Updates Euro Forecasts Pou Forecasts