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Posted May 20th, 2011 by Charles Purdy

EUR/GBP Rate & Comments for 20th May 2011


Sterling gained against the euro and US dollar yesterday after UK retail sales data beat expectations. However, investors took the opportunity to take profits on the gains and as such sterling fell off from the day’s earlier highs. Retail sales jumped by 1.1% in April, beating expectations of a 0.8% gain and were boosted by a number of bank holidays and the Royal Wedding. However, this had no impact on analyst expectations that the UK recovery would lag and the Bank of England would refrain from raising interest rates in the near future. Financial markets are pricing in a 0.25% rate rise in January of next year after the Bank of England’s meeting minutes showed no change in the voting from the previous month. Despite inflation coming in higher than expected, the Bank governor said that an interest rate hike could threaten the recovery. Call in now for a live exchange rate.
In the euro zone, it has been a turbulent week following the arrest of IMF chief Dominique Strauss-Kahn. Strauss-Kahn had been seen as a key player in the negotiation of a new bail out for Greece. The euro stabilised towards the end of the week though after finance ministers approved the emergency bail out loan for Portugal, passing through the decision without the help of Strauss-Kahn. However, with fears of a restructuring of the debt in Greece, the euro’s gains are likely to be limited. Get in touch for a live price.

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