Egypt & Portugal Send Pound to Euro, Dollar, Australian & NZ Dollar Exchange Rates Higher

Modified: Wednesday, 3 July 2013 13:29 BST - Written by James Fuller

STORY LINK Egypt & Portugal Send Pound to Euro, Dollar, Australian & NZ Dollar Exchange Rates Higher

The Pound to euro exchange rate (GBP EUR) has jumped ahead so far today, climbing to as high as 1.1787 earlier. The positive move for the pair was driven by news from perennial struggler Portugal. The peripheral Atlantic state has been plunged into crisis by the news that two of the government’s most senior ministers have resigned as an apparent reaction to the widespread anti-austerity protests which have taken place during the past week. The news places the nation’s ruling coalition government at risk and this in turn puts Portugal’s ongoing austerity plan in jeopardy. Portugal’s borrowing costs have soared as a reaction to the development and the single currency has leaked support as investors fear a repeat of Greece’s acute debt crisis of the past three years.

Elsewhere, anti-government protests in Egypt have dominated headlines across the world in recent days, with hundreds of thousands of protestors taking to the streets to register their displeasure at the non-inclusive path which President Morsi’s ruling Muslim Brotherhood party has taken since he came to power a year ago. The unrest has caused the price of a barrel of US light crude oil to soar to above $100 per barrel for the first time since last Autumn as a result. The US Dollar has lost ground against the Pound as a consequence, sending the GBP USD exchange rate sharply upwards to 1.5274 earlier due to the USA’s continued dependence on imports of black gold in order to fuel its economy.

Events in Portugal and Egypt have caused global share markets to give up ground on the day, with London’s FTSE 100 trading down by almost 2% by the middle part of the day. The ‘risk off’ trading environment has caused market participants to shun the commodity Dollars, sending the GBP AUD, GBP NZD and GBP ZAR sharply higher on the session.

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