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Posted August 18th, 2010 by Charles Purdy

EUR/GBP Rate & Comments for 18th August 2010

EUR/GBP – 1.209

Sterling fell yesterday against the US dollar and euro yesterday after inflation data showed a slow down in UK price growth. Sterling hit a high of $1.57/£1 in early trading yesterday before a US bank sold a large amount of sterling, and in thin trading, this caused the pound to drop down to a session low of $1.5560/£1. CPI inflation data didn’t necessarily help sterling either, coming in lower than last month at 3.1% for the year against last month’s reading of 3.2%. This is the eighth straight month that inflation has exceeded the Bank of England’s 2% target and yet again requires Governor Mervyn King to write an explanatory letter to Chancellor George Osborne. King is adamant that inflationary pressures are short term and will ease over the next 2 years. This remains to be seen, but with the Bank of England minutes released tomorrow, it is likely that this will be the tone that was set. Speak to a specialist now to ensure you are buying at the right time.

In the Eurozone, German ZEW economic sentiment fell by more than expected after recent poor GDP data, but European sentiment as a whole improved. This mixed data had little impact as the euro rose 0.8% against sterling following a boost in risk sentiment towards the single currency after a better than expected bond auction saw investor confidence jump. The reason for this was that the Irish government successfully auctioned 1.5bn worth of bonds despite major concerns over the country’s banking sector. Call in now for a live exchange rate.

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