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Posted April 6th, 2009 by Charles Purdy

Weekly € rates and comments – week commencing 6th April 2009

The G20 summit in London last week had been touted during the run-up as perhaps the pivotal moment for the major powers dealing with the global recession and how we all may survive the ensuing fall-out. So far we have learnt as much about the divisions within certain camps at the meeting as we have about the actions and process for moving forward and limiting this damage. Last week  started positively and continued through the week and sterling’s value improved to see increases of about 3% against the euro and  5% on the US$. The Bank of England meets this week and is expected to keep UK interest rates on hold. We also have important economic data released here, in Euro land and in the US so it could be a volatile week for exchange rates. . However the week has started positively for sterling and so we wait to see whether this is yet another false dawn for sterling.

 

The euro has lost ground against sterling and sits at €1.103/£1 inter bank. The European Central Bank (ECB) surprised the markets last Thursday by cutting interest rates down by only 0.25% rather than the 0.5% widely anticipated by most parties. The euro interest rate, now at 1.25%, is at a record low in the short history single currency and in a statement shortly after the decision, JC Trichet, the president of the ECB, refused to rule out a further cut next month. With no other significant economic data for the euro released last week the euro gained marginally against the Swiss Franc and the US$ thanks to momentum carried from previous weeks’ trading.

 

 

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