Pounds to Euro Exchange Rate Today - GBP USD Heads Downwards, GBP EUR Exchange Rate Holds Close to 9-Month High

December 19, 2011 - Written by Frank Davies

STORY LINK Pounds to Euro Exchange Rate Today - GBP USD Heads Downwards, GBP EUR Exchange Rate Holds Close to 9-Month High

The Pound Euro exchange rate (GBP EUR) is 1.1898. The Pound Dollar exchange rate (GBP USD) is 1.5493. The Pound Australian Dollar exchange rate (GBP AUD) is 1.5577.

This week has begun with further bad news for the Eurozone, as leading ratings agency Fitch downwardly revised its outlook for the French economy from ‘stable’ to ‘negative’. In its accompanying report, Fitch stated that it was taking the action because of the French government’s exposure to potentially toxic debt. However, on a more positive note, Fitch maintained France’s credit rating at ‘AAA’.

Last week had ended on a negative for the Euro, with the Irish government releasing statistics which showed that Ireland’s economy contracted by nearly 2% in the three months to the end of September. Ireland had experienced economic growth of 1.4% in the second quarter of 2011, so the data showed what a marked effect the stringent austerity measures which have been imposed on Ireland are having.

These developments have led to continued Euro weakness in the market, seeing the GBP EUR rate holding above the 1.1900 level. The EUR USD exchange rate has tested the key 1.3000 level and has, up to this point, avoided holding below this level. However, the market will be closely watching comments from Mario Draghi, the ECB President, when he addresses the European Parliament later today. If Draghi’s words soothe the market then there is potential for a limited recovery for the Euro.

Elsewhere, the US Dollar has been well supported in the markets, as fears persist over the potential for contagion from the Eurozone to cause a drop off in global economic activity. If stock markets lose ground on the session, then a break below 1.5500 is likely for the GBP USD exchange rate.


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