All change: The latest currency conundrum |
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| Finance | |
| Written by Gary Howes | |
| Wednesday, 11 February 2009 | |
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Traders expect rates against the Euro to dip below the €1.10 Interbank rate by the end of this week, according the currency specialists FC Exchange. UK data released this week has been weaker than usual – particularly in the case of the export and unemployment figures. This coupled with the Euro flattening out a freefall after speculation on EU banks taking losses from Russian loans and the US Dollar gaining short-term strength after the Senate passed the stimulus package, means Sterling will suffer yet again. Daniel Wray, Senior Currency Broker at FC Exchange comments: “It’s been a busy few days in the currency markets and already today we can see Sterling trying to recoup some of the losses it made this morning. However, with the inflation report expected to show a more negative outlook, Sterling may not be able to hold up. “The gains we’ve seen against the US Dollar have unfortunately been short-lived. We can expect to see short-term strength in the Dollar and whilst it is a good time to sell them, the next few moths will see the currency weakening, allowing Sterling to come back into play.” Sterling is currently held at $1.43 against the US Dollar, while against the Euro, Sterling is at €1.10 – both down over one percent from market open this morning. Wray continues: “How Sterling performs against the Euro will be shaky until the ECB interest rate decision, when it is more than likely we’ll see the Bank cut rates to keep in line with other central banks. On the flip side, this may cause strengthening of the Euro, ultimately making Euro purchases more expensive.” Comments (0)
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