The pound has weakened slightly against the Euro, dropping from its four year high of 1.2549. The stronger than expected GDP figures out of Germany and the Eurozone has caused the single currency to rally against a number of other currencies.
The Eurozone avoided sliding back into recession thanks to the economic strength of German manufacturing. The better than expected GDP figures have rekindled investor confidence and risk appetite. The figures have also reduced the attraction of currencies regarded to be safe havens such as the US Dollar. Demand for sterling also dropped as a result.
The Euro has also grown slightly against the US Dollar coming back from a four month low. The news from Greece has created a lot of uncertainty but rumour’s from a number of EU leaders that the Greeks may be given more time to meet its fiscal deadlines has helped ease worries.
The weakening of the pound is not expected to last with it looking increasingly unlikely that a new government can be formed in the embattled nation. The anti austerity parties are predicting an overall victory in the electoral rerun and that will most likely lead to the departure of Greece from the Euro. Such uncertainty is sure to see investors flocking back to the safer currencies of the Dollar and pound.
The improvement in risk sentiment saw the Australian Dollar rise for a near five month low, with technical indicators suggesting the Aussie has fallen too far and is due a correction.
The Pound to Euro exchange rate is currently trading at 1.252
The Pound to US Dollar exchange rate is currently trading at 1.602
The Euro to US Dollar exchange rate is currently trading at 1.279
The Euro to Pound exchange rate is currently trading at 0.798
Comments are closed.