Dollars to Pounds exchange rate today - GBP USD Holds Steady as GBP EUR Drifts Downwards

December 5, 2011 - Written by Ben Hughes

STORY LINK Dollars to Pounds exchange rate today - GBP USD Holds Steady as GBP EUR Drifts Downwards

The Pound Euro exchange rate (GBP EUR) is 1.1640. The Pound Dollar exchange rate (GBP USD) is 1.5641. The Pound Australian Dollar exchange rate (GBP AUD) is 1.5283.

Last week’s session in the currency markets was marked by the return of global appetite for risk amongst institutional investors, which caused the FTSE 100 index to gain 7% on the week. New York’s Dow Jones gained a similar amount.

Market participants were encouraged by suggestions that Eurozone policy makers were determined to tackle the region’s debt crisis. This resolve was emphasised over the weekend as politicians in both Ireland and Italy outlined their plans for deepening the austerity measures already in place in the respective countries.

Ireland’s Taoiseach Enda Kenny addressed his nation in a television broadcast, warning that Ireland’s ailing economy is spending €16bn more than it is generating in revenues on an annual basis. He went on to caution that there would be tough times ahead and outlined a four-year plan for tackling the country’s deficit.

Meanwhile, in Italy, new Prime Minister Mario Monti brought forward a cabinet meeting in order to gain his ministers’ consent for a package of measures designed to reduce the country’s mammoth deficit. The proposed actions include raising the national age of retirement and hiking taxes on wealthier citizens. The proposed measures are so stringent that they caused Italian minister Elsa Fornero to break down in tears as she explained them during a televised announcement last night.

The market’s instant response to these developments has been Euro-positive, seeing lower yields on Eurozone bonds and European equities markets opening the week higher.

This morning sees the release of whole-of-Eurozone Retail Sales numbers for October. If these better analysts’ expectations of a 0.8% annualised contraction, then there is potential for the Euro to come in for further support. This could see the GBP EUR exchange rate settle back into the 1.15s, particularly if the noises emanating from today’s Franco-Germanic summit are positive.


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