Pound to Euro, US Dollar exchange rate: The Pound declined against the Euro, falling back towards 1.2450

The Pound declined against the Euro, falling back towards 1.2450The Euro plunged to a fresh four-month low against the U.S Dollar, extending declines to a third straight week, amid concern that the sovereign debt crisis is worsening

Sterling / Euro and US Dollar exchange rates

The Pound declined against the Euro yesterday, falling back towards 1.2450, while the UK currency slumped towards a new low under 1.58 versus the U.S Dollar, as global risk appetite weakened on the threat of contagion in the Euro-zone. The single currency fell to a new four month low against the U.S Dollar, as Spain’s borrowing costs rose at the latest bond auction, which increased concerns that the Greek debt crisis is spreading to other Euro-zone economies.

As a result, the Euro declined against the Dollar and the Yen, as a flight to safety for investors ensued. Traders will be flocking to the U.S Dollar as a safe haven from the turmoil as global stocks and commodities markets plunge. The ECB has said it will stop lending to some Greek banks and the Chairman Mario Draghi signaled the ECB won’t compromise to keep Greece in the Euro-zone.

The Pound was unable to make any headway against the Dollar and retreated steadily through the course of the day before finding a degree of support. The scope for defensive UK support was perfectly illustrated by the latest two-year bond auction, as yields fell sharply to 0.35% as bidding interest remained strong.

The Pound was unable to challenge near-term resistance levels above 1.25 against the Euro, amid further speculation that the Bank of England could sanction quantitative easing within in the next two months. MOC member Fisher did state that further bond purchases would be unlikely unless there was the threat of a deeper recession.

There was increased concern surrounding the UK economy, especially given the threats to the European outlook. Risk conditions will remain an important focus and an increase in fear pushed the Pound lower against the Dollar again over-night. The Australian and New Zealand Dollars weakened against the majors last night, as stocks dropped again on concern increased Euro-zone debt is escalating.

Euro / US Dollar

The Euro plunged to a fresh four-month low against the U.S Dollar, extending declines to a third straight week, amid concern that the sovereign debt crisis is worsening. The single currency weakened to the weakest in three months versus the Yen, as investors flocked to the relative security of lower-yielding assets, after Fitch Ratings downgraded Greece’s long-term credit rating.

The ratings agency cited heightened risk that the struggling nation may not be able to sustain membership in the monetary union. The Euro traded at 1.2655 yesterday, the weakest level since January 17th, as the market’s concern about contagion and Spain came into focus. The Euro has weakened 1.9% against the Euro in a week, the longest stretch of declines since January 13th.

In the U.S, the latest jobless claims data was broadly in line with expectations, unchanged from, 370,000 in the latest week. In contrast, there was a much weaker reading for the Philly Fed Index, as it dropped to -5.8 from 8.5. There was also a significant deterioration in most of the major components, which raised some doubts over the U.S economic outlook.

Data Released Today

G8 – G8 Summit (To Saturday 19th May)

Related posts:

  1. Exchange Rate News – The Pound declined against the Euro falling back towards 1.1470
  2. The Pound weakened significantly against the majors, falling back towards 1.1805 interbank
  3. The Pound declines, falling over one percent against the Euro exchange rate
  4. The Pound declined against the Euro yesterday, falling back under the technical support at 1.16
  5. Pound Sterling, the Euro and US Dollar exchange rate news flash – The Pound weakened back towards 1.5950 against the U.S Dollar this morning

Article source: http://feedproxy.google.com/~r/ForeignExchangeOutlook/~3/FfU5C9CXgXs/

Leave a Reply

WP2FB Auto Publish Powered By : XYZScripts.com
Bunk Beds