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Posted August 4th, 2010 by Charles Purdy

EUR/GBP Rate & Comments for 4th August 2010

EUR/GBP – 1.207

Sterling hit a new 6 month high against the US dollar yesterday after improved sentiment towards the UK and concerns over the state of the US recovery. The pound hit $1.5968/£1 at lunchtime yesterday, buoyed by robust bank earnings data and recent strong UK economic data from the manufacturing sector and better than expected growth figures on Friday. However, sterling’s run was held back after construction activity data fell to a four month low. As a result, sterling stopped just short of the key level of $1.5970/£1, which is an important ‘technical’ recovery point from May’s $1.4225/£1 low. Whilst we might see sterling push through this level after today’s service sector data (which is expected to show growth) there is expected to be strong resistance at the $1.60/£1 level – firstly from a psychological perspective, and as there are reportedly numerous ‘sell’ orders set to trigger at that price, which will see sterling drop should we hit that price. Either way, get in touch now to ensure you are taking advantage.

In the Eurozone, the euro had a flat day against sterling but strengthened to a high of $1.3262/1 as concerns over the US economy saw the US dollar lose ground across the board. Inflation data for the Eurozone came in slightly worse than expected, showing 0.3% against an expectation of 0.4%. Out today, there is purchasing manager data and also retail sales which are expected to be flat. Despite a quiet day on the sterling/ euro front, there is always potential for significant volatility. Call in now for a live exchange rate.

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