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Posted December 23rd, 2007 by Charles Purdy

Weekly € rates and comments – week commencing 24th December 2007


Sterling has had a bad week. First the minutes of the last Bank of England interest rate meeting were released and showed that the vote to reduce interest rates was unanimous. This surprised the market. Then the balance of payment figures were released. These were very bad with a huge net outflow of funds from the UK. And now the Christmas retail period is not going as well as hoped and house prices continue to fall in most places. All doom and gloom so it is not a surprise that sterling is suffering. Sterling only seemed to make a gain against the South African rand. Shows how the market views the new head of the ANC in South Africa! But I suppose they did win the rugby world cup.


The € is still the preferred currency and sits at €1.382/£1 inter bank. Inflation continues to be of concern to the European Central Bank. So any cuts in € interest rates are very unlikely short to medium term. But clearly the credit crunch is having an affect on Euro land as the ECB lent €350 billion to financial institutions last week who were having difficulty borrowing elsewhere. And I still feel that Euro land cannot be immune to the slow down elsewhere. Talking to one of my clients who does a lot of business in Euro land he said there was a lot of pain being suffered by Euro land exporters given the strong € exchange rate.




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Posted December 17th, 2007 by Charles Purdy

Weekly € rates and comments – week commencing 17th December 2007

  Sterling has been steady and has gained against most currencies apart from the US$. Economic news has been mixed with pressure on house prices and sales volume countered by a surge in production price inflation. The latter means that the market has become unsure on future cuts in UK interest rates. The central banks  Continue Reading…

Posted December 10th, 2007 by Charles Purdy

Weekly € rates and comments – week commencing 10th December 2007

  Sterling lost ground against everything this week. The Bank of England cut UK interest rates by 0.25%. A slight surprise but on the back of weak economic data, including falling house prices and poor retail sales, better to start the cuts earlier rather than too late. There will be further reductions in UK interest  Continue Reading…

Posted December 2nd, 2007 by Charles Purdy

Weekly € rates and comments – week commencing 3rd December 2007

Sterling had another steady week. The Bank of England is giving mixed messages. It is concerned about inflation but at the same time concerned about the slowing UK economy. House prices are falling while fuel costs are going up. The market is confident the BOE will cut UK interest rates but is unsure when. Some  Continue Reading…

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