Pound to Euro Exchange Rate Today - GBP EUR Heads Downwards On Negative UK Growth Figure

February 10, 2012 - Written by David Woodsmith

STORY LINK Pound to Euro Exchange Rate Today - GBP EUR Heads Downwards On Negative UK Growth Figure

The Pound Euro exchange rate (GBP EUR) is 1.1913. The Pound Dollar exchange rate (GBP USD) is 1.5811. The Pound Australian Dollar exchange rate (GBP AUD) is 1.4786.

Events yesterday afternoon provided grounds for optimism that Greece was on the verge of resolving its ongoing debt crisis, for the time-being at least, when ECB President Mario Draghi announced to the world that warring coalition parties in the debt-addled Hellenic state had reached an agreement on how to fund the spending cuts demanded by the EU/IMF/ECB in order for the country to qualify for its next tranche of bail-out funding. Greece needs to receive the funding in order to avoid an ignominious debt default next month.

The development saw the euro come in for sustained support during yesterday afternoon’s European session, sending the GBP EUR exchange rate down to an intraday low of 1.1891. The euro was further strengthened by the ECB’s lunchtime decision to maintain its key lending rate at 1.00% - market participants holding euros had factored-in an outside chance of a 25 basis point cut ahead of the decision.

However, positive market sentiment toward the euro was relatively short-lived, as eurozone Finance Ministers responded to the news of an accord from Athens by putting in place additional demands which Greece will have to meet by next Wednesday in order to qualify for the next €130bn of its bail-out funding. These demands include an additional €325m in spending cuts and parliamentary ascent for yesterday’s coalition agreement.

Elsewhere, the Bank of England’s Monetary Policy Committee elected to maintain interest rates at their current record low of 0.50% and to extend the UK’s asset purchase scheme by £50bn, taking the total allocated to the programme to £325bn. The market reacted relatively positively to the move by the bank, viewing it as appositive step towards getting Britain’s ailing economy going again.

However, there was Sterling-negative news just before the European close yesterday, with the release of the NIESR GDP Growth estimate for January. The figure predicted that Britain’s economy is contracting at a quarterly 0.2%. In a further blow to the Pound, the NIESR data also saw December’s positive growth estimate of 0.1% downwardly revised to -0.2%. This raises the potential for considerable downside pressure on Sterling before the currency markets close for the week at 2200hrs GMT tonight.


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