Pound Sterling: GBP/EUR & GBP/USD Exchange Rates Improve

July 22, 2013 - Written by Minesh Chaudhari

STORY LINK Pound Sterling: GBP/EUR & GBP/USD Exchange Rates Improve

The weekend market shutdown brought an action from Japan’s government which is sure to provoke debate regarding the future role which the UK will take in the European Union. At the request of Britain’s coalition government, Japan’s embassy issued a statement regarding the effect which the UK leaving the European Union would have on the domestic economy. The Japanese verdict did not make positive reading for pressure groups calling from a UK exit from the EU.

The Japanese embassy stated that its nation’s firms were attracted to the UK because it offered a gateway into the EU. The Japanese delegation warned that if the UK cut its links with continental Europe, then Japanese enterprises would be likely to shift the thousands of British jobs which they have generated to other more attractive shores.

The UK government’s stated stance regarding its future in Europe was re-iterated by the nation’s Prime Minister David Cameron during a television interview yesterday. The British Premier wants closer ties between the seventeen nation states which use the euro, but he sees the flipside of this as the UK having to renegotiate a less rigid relationship with the eurozone. The UK Premier has stated that, in due course, should his Conservative party win the next general election, a referendum will be held on the UK’s continued membership of the European Union. The weekend input from Japan suggests that Cameron’s plans could potentially have a dramatically negative effect on the UK economy, should Britain’s electorate vote to leave the EU.

The Pound has held up reasonably well since the currency markets reopened for business last night. The Pound Sterling Euro exchange rate (currency : GBP EUR) briefly dipped into the 1.1400s during the middle part of last week’s session, but when this week’s trading began in Asia overnight the pair was changing hands in the 1.1600s. Meanwhile the Pound Sterling to US Dollar exchange rate (currency : GBP USD) started the week just below the 1.5300 threshold.

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