Foreign Exchange Report : GBP EUR Rate Down As Eurozone Finance Ministers Approve the Next ?8bn of Bail-Out Funding For Greece

October 24, 2011 - Written by John Cameron

STORY LINK Foreign Exchange Report : GBP EUR Rate Down As Eurozone Finance Ministers Approve the Next ?8bn of Bail-Out Funding For Greece

The Pound Euro exchange rate (GBP EUR) is 1.1484. The Pound Dollar exchange rate (GBP USD) is 1.5966. The Pound Australian Dollar exchange rate (GBP AUD) is 1.5350.

This week’s session begins with investors focussing on events in the Eurozone, where policy-makers are locked in talks to thrash out a workable proposal to deal with the region’s sovereign debt crisis.

Last week ended on a positive note for Europe, with the announcement, just before the week’s session in the currency markets ended, that Eurozone Finance Ministers had approved the next €8bn tranche of bail-out funding for Greece. The payment still needs to be rubber-stamped by the IMF, but providing this takes place, the troubled Hellenic state will take delivery of the funding within three weeks, enabling it to meet its existing debt obligations into the New Year.

Eurozone Finance Ministers continued their discussions over the weekend. The talks are due to draw to a conclusion on Wednesday, when a Debt Summit takes place. It is understood that discussions are centring on plans to boost the liquidity of European retail banks as well as dealing with Italy’s debt problems and the format of a much-needed second bail-out for Greece.

Global equities markets have fared well so far during their first session of the new week; Hong Kong’s Hang Seng index gained over 4% overnight and European and UK indices have opened up on the session. This suggests that investors’ appetite for risk is on the up now that European officials are taking concrete steps to address the Eurozone crisis.

The Euro is also benefitting from the Eurozone’s developments over the past 72 hours. The GBP EUR rate opened this week’s session at 1.1508, but has traded as low as 1.1460 in early trading today. Further movements for the pair will be determined on news emerging from Europe today.

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