Pound to Euro exchange rate: The Pound declined through 1.58 against the U.S Dollar yesterday.
Sterling / Euro and US Dollar exchange rates
The Pound declined through 1.58 against the U.S Dollar yesterday, while the UK currency continued to test resistance in the region of 1.20 versus the Euro. A report showed that UK house prices declined for a third month in four in February, while retail sales declined, as the uncertainty surrounding the economic outlook curbed consumer spending.
House prices were down 0.5% from the previous month, while sales slumped 0.3% to match the pace of January. However, recent reports on PMI manufacturing and service sector growth point to a recovery in the economy during the first quarter and that may yet be enough to ward off the threat of a contraction and a technical recession, which would tend to support Sterling.
UK stocks declined again yesterday and the FTSE 100 Index has suffered its biggest three-day drop since January, as investors await a deal for Greece. That has had an impact on global risk sentiment and the high-yielding currencies like the Australian Dollar and South African Rand, which have weakened significantly versus the majors.
The major impact in the market was from the deterioration in risk appetite and the Pound will be influenced by trends in risk conditions, especially given the underlying UK banking sector vulnerability. UK shop price inflation slowed to the lowest level in almost two years in February, while retail sales rose 1.2% from a year earlier, the least since March 2010.
The Bank of England meeting on Thursday will probably result in a “no change” on interest rates again with the latest forecasts showing that policy makers won’t raise borrowing costs until the fourth quarter of 2013. It is also likely that the BoE will maintain bond purchases at the current level, after increasing it by £50 billion in February.
The Pound has remained close to the 1.20 level versus the Euro, as data in Europe showed the economy contracted during the fourth quarter. The revised estimate of Euro-zone GDP showed a decline of 0.3% in the final three months of 2011, adding to speculation of a recession engulfing the Euro-zone. Swings in risk sentiment will continue to influence the market today, after a fundamental lack of significant economic data scheduled for release.
Euro / US Dollar
The Euro encountered strong resistance in the region of 1.32 versus the U.S Dollar yesterday and was subjected to fresh selling pressure, as the market moved towards 1.31 by the close of trading last night. The decline in risk appetite was the primary driver of Dollar strength, as investors returned to the relative security of safe haven assets following the sharpest decline in stocks this year.
There were further uncertainties surrounding the Greek private-sector debt restructuring and the net impact was to weaken the Euro. There was an initial warning from the IMF that a disorderly Greek default could cost €1 trillion. There was no significant economic data released in the U.S yesterday with markets waiting for the non-farm payrolls data on Friday.
GER 11:00 Industrial Orders (January)
U.S 13:15 ADP Employment (February)
U.S 13:30 Revised Productivity (Q4)
– Labour Costs
U.S 20:00 Consumer Credit (January)
- The Pound declined against the Euro exchange rate yesterday to a low of 1.1974
- Pound Sterling, the Euro and US Dollar exchange rate currency news – The Pound declined against the Dollar yesterday
- Daily Foreign Currency Exchange Rate Forecast News – The Pound initially declined against the majors yesterday
- Sterling, Euro and US Dollar exchange rate news – The Pound declined heavily against all of the 16 most actively traded currencies yesterday
- The Pound declined against the Euro and the Euro rallied higher against the Dollar early yesterday