The pound has surged to a new 19-month high against the Euro after the Bank of England’s April policy meeting showed that there will not be an increase in Quantitative easing this month.
As a result of the meeting, the Pound has strengthened against the 16 most actively traded currencies. News of the committees 8-1 split vote, sent the pound up a cent against the euro to €1.2218.Its highest level since August 2010.
The Pound is trading up towards 1.60 versus the U.S Dollar but strong resistance is keeping Sterling below the psychologically significant mark, whilst the push above 1.22 versus the Euro is the Pound’s strongest performance since 2010.
Elsewhere in the Eurozone the problems for Spain continue to mount up. The head of the Bundesbank Jens Weidmann warned that the embattled country should not rely on receiving any extra help from the European central bank (ECB).
He said; “We shouldn’t always proclaim the end of the world if a country’s long-term interest rates temporarily go above 6%….That is also a spur for policymakers in the countries concerned to do their homework and to win back (market) confidence through the pursuit of the reform path.”
Worries also continue to mount about Spain’s neighbour Portugal. The country’s Prime Minister Pedro Passos Coelho, released a statement saying that he was optimistic about the country’s future, but did not rule out the possibility of the country needing another bailout.
In a stark comparison Germany today sold €4.21bn of debt at a record low this morning, as investors continue to regard its bonds as a safe haven. The auction was seen as a big success for the German economy during a period when fear of a renewed deepening of the euro crisis remains.
In China property prices have fallen for the sixth consecutive month increasing worries that the country’s economy is slowing at a faster rate than predicted. The booming housing industry supported China’s expansion in recent years, with real estate investment making up 13% of the nation’s gross domestic product in 2011. If Chinas predicted growth shrinks faster than expected then the other global currencies are sure to see a knock on effect.
The Pound to Euro exchange rate is currently trading at 1.221
The Pound to US Dollar exchange rate is currently trading at 1.597
The Euro to US Dollar exchange rate is currently trading at 1.307
Comments are closed.