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Posted July 28th, 2010 by Charles Purdy

EUR/GBP Rate & Comments for 28th July 2010

EUR/GBP – 1.197

Sterling continued to strengthen to a 5 month high against the US dollar after better than expected retail sales data boosted the pound further off the back of last week’s strong GDP data. Sterling hit a high of $1.5570/£1 as better than expected bank earnings data saw investors look to riskier investments away from ‘safe haven’ US dollar holdings. UBS beat profit forecasts and Deutsche bank delivered stronger than expected results after a fall in losses from loans. However, the same appetite for risk that saw the pound strengthen so much against the US dollar kept the pound below 1.20/£1 as the euro is the more ‘riskier’ investment option when compared to sterling. Later today, the Monetary Policy Committee appears before the Treasury Select Committee to present on monetary policy and growth expectations. Some analysts are fearful that given the recent minutes of the Bank’s last meeting, the rhetoric is likely to be negative which could impact sterling. Get in touch now for a live exchange rate.

In the Euro zone, the euro continues to enjoy relatively strong support despite the heavy criticism that the bank stress tests have attracted in recent days. One analyst went so far as to express complete bemusement at the support the euro was seeing, after the methodology behind Friday’s test results has widely been shown to be flawed, and as such, the result that showed only 7 banks need further capital is a huge underestimation of the true situation. Regardless, the euro briefly pushed past 1.30/$1 for the first time since early May. Out later today there is German inflation data. Get in touch now for an exchange rate.

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