Written by Adam Solomon on February 14th, 2012
The Pound to Euro Exchange Rate has remained in close contact, falling only slightly to 1.193 (10:55 GMT).
Sterling / Euro and US Dollar exchange rates
Whitney Houston’s death has sparked controversy in the music industry as her greatest hits album The Ultimate Collection saw a price hike over the weekend from £4.99 to £7.99. Critics have accused Sony Music of cashing in on the singer’s death and described their behaviour as shameful. The decision seems especially flawed when viewed in consideration with today’s falling CPI Inflation figures.
The Office for National Statistics announced that UK inflation slowed to the lowest level in 14 months, dropping from 4.2% in December to 3.6% in January. The main causes were fading consumer demand and market re-adjustments following last year’s sales-tax increase. The figure appears to vindicate the Bank of England’s decision to raise quantitative easing by a further £50 billion last week to £325 billion; as it falls in line with their forecast that inflation would fall to just above 3.4% in the first 3 months of 2012.
The Pound to US Dollar Exchange Rate extended its decline following the data release falling to 1.571 initially before recapping its losses and consolidating at 1.575 (10:45 GMT). Sterling and the Euro both lost out to the US Dollar this morning as Moody’s credit rating agency announced a fresh bout of ratings downgrades and outlook changes.
Following in Fitch’s footsteps – but with marginally less bite – Moody’s cut Italy, Malta, Portugal, Slovakia, and Slovenia by one notch; the ratings agency saved their sharpest sword for Spain who they cut by two notches from A1+ to A3. Britain saw its AAA rating thrown into doubt as their outlook was downgraded from stable to negative; Moody’s cited “susceptibility to the growing financial and economic risks created by the Eurozone,” as their primary cause for concern.
The Euro to US Dollar Exchange Rate fell below 1.315 following the downgrades but has managed to pull itself back up to 1.320 (10:55) this morning following stronger than expected German ZEW survey figures for February: Economic Sentiment rose from -21.6 to 5.4 and Current Situation improved from 28.4 to 40.3.
The Pound to Euro Exchange Rate has remained in close contact, falling only slightly to 1.193 (10:55 GMT). In theory Sterling should remain in good stead against the Euro: the UK’s inflation figures should have already been priced into the markets – just like last week’s asset purchasing improvements were; and the fact that Britain only received a warning whereas the Eurozone was hit with 6 actual downgrades would also point logically to a better performing day for the Pound. But so far this remains to be seen with the Euro posting gains of 0.2% this morning.
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