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Posted June 22nd, 2011 by Charles Purdy

EUR/GBP Rate & Comments for 22nd June 2011

EURO/GBP - 1.1274

Sterling dropped sharply against the euro yesterday after key Bank of England policymaker Paul Fisher signalled that the UK could be in for further Quantitative Easing if deflationary pressures mount. With recent UK data underperforming, analysts have pushed back expectations of an interest rate hike in the UK well into next year. Earlier in the year, markets had been anticipating an interest rate rise as early as April 2011, so this rather dovish assessment by Fisher is not necessarily a surprise. The Bank of England’s minutes from this month’s meeting are released today and they are expected to show a continually loose monetary stance from the Bank of England. Ensure you protect any future payments in case sterling drops much further.

In the euro zone, after a turbulent day on Monday, the euro held on to slim gains against other currencies as investors bet that a rescue plan would be put together to prevent Greece from defaulting on its debt. However, there was a major hurdle in the form of a confidence vote in the Greek Parliament. PM George Papandreou had to win the vote in order to pave the way to enacting tough austerity legislation. The vote did in fact see the PM win the vote of confidence and investors took profits from the relative strength of the euro. Call in now for a live exchange rate.

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