GBP EUR Exchange Rate Tumbles Into The 1.1400s

Modified: Wednesday, 17 July 2013 09:18 BST - Written by Toni Johnson

STORY LINK GBP EUR Exchange Rate Tumbles Into The 1.1400s

A packed day for global data releases yesterday brought pronounced lurches in the relative value of several of the world’s leading currencies. The upshot saw the Pound to euro exchange rate (currency : GBP EUR) briefly trade down into the 1.1400s during the latter part of Europe’s equities session as traders priced-in the morning’s UK and whole of eurozone Consumer Price Index inflation data which appeared to suggest that the European Central Bank retains far more scope than the Bank of England to pursue its current ultra-loose monetary policy stance.

The single currency enjoyed sustained support throughout the day in spite of a negative German ZEW Sentiment survey and a report from the Organisation For Economic Co-operation and Development (OECD) which painted a dismal picture of the current state of the labour market in mainland Europe. The OECD’s report predicted that the overall level of unemployment in Greece and Spain would climb to a staggering 28% by the end of next year. The widely-respected think tank went on to forecast that the jobs situation for young workers in the region would remain extremely bleak for some years to come.

Meanwhile, yesterday also brought a request from the Bank of England to the newly-instigated Financial Conduct Authority (FCA), which took over from the Financial Services Authority as the official government watchdog of the UK Financial Services industry in April, to investigate the conduct of bond traders who took part in the Bank’s asset purchase scheme. The Bank has suggested that suspicious activity which could have been triggered by price-fixing from traders, was observed during one auction of 2017-dated bills during the year 2011. Any hint that the BoE’s QE programme was based on rigged market activity would have the potential to hurt the UK central bank and its new Governor Mark Carney. Any such revelation could also trigger a renewed bout of Sterling selling pressure.

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TAGS: Daily Currency Updates Euro Forecasts Euro Pound Forecasts Pound Eu Forecasts