Pounds to Euros Exchange Rate Today - GBP AUD Heads Lower While GBP USD Remains Level

December 8, 2011 - Written by John Cameron

STORY LINK Pounds to Euros Exchange Rate Today - GBP AUD Heads Lower While GBP USD Remains Level

The Pound Euro exchange rate (GBP EUR) is 1.1717. The Pound Dollar exchange rate (GBP USD) is 1.5699. The Pound Australian Dollar exchange rate (GBP AUD) is 1.5297.

The Eurozone once again provided the focus for currency market investors during yesterday’s session, ahead of tomorrow’s key EU summit in Brussels.

The main headline-grabber was a joint letter from French President Nicolas Sarkozy and German Chancellor Angela Merkel to European Council President Herman Van Rompuy. The letter called for the harmonisation of EU taxation policy, starting with corporation tax and financial transaction taxes. The letter appears to be positing the details of a plan for deeper fiscal union among EU member, which has been a topic of conversation for some weeks.

Herman Van Rompuy had laid the groundwork for changes to the set up of the Eurozone when he commented earlier on that an alteration to the existing Eurozone treaty might not be necessary in order to implement changes to the Eurozone’s remit.

The market’s initial response to these developments was Euro-negative, seeing the GBP EUR rate rise to a 4-week high of 1.1749 during yesterday afternoon’s European session.

The upward move in the GBP EUR rate was further driven by institutional investors trimming their Euro positions ahead of this afternoon’s European Central Bank interest rate decision. Many analysts are expecting the ECB to cut its key lending rate by 25 basis points from 1.25% to 1.00%, which would further erode the Euro’s relative yield advantage to against the Pound.

Meanwhile, in the UK, Sterling was well-bid during yesterday’s session as November’s NIESR GDP growth estimate hinted that UK economic activity is expanding at respectable 0.3%. The Pound was further supported by comments from UK policy-makers; Chancellor of the Exchequer George Osborne announced to the Treasury Select Committee that the government is looking at working in partnership with UK retail banks in order to make additional funds available to British businesses, while Prime Minister David Cameron re-iterated that he would fight for Britain’s national interests during any potential EU treaty discussions.


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