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Posted July 5th, 2012 by Charles Purdy

EURO/GBP Rate & Comments for 5th July 2012

EURO/GBP – 1.2448

Sterling had a poor day yesterday as the services Purchasing Managers’ Indices (PMI) figures released were worse than expected. The focus yesterday was on former Barclays boss Bob Diamond as he went before the Treasury Select Committee to explain the LIBOR fixing scandal that has shaken the already fragile financial sector. The market expects that the Monetary Policy Committee will vote to keep interest rates on hold today at 0.5%; but, look to increase quantitative easing by £50 billion in attempt to shore up the UK’s economy. There is the potential for a lot of volatility today, especially with the European Central Bank’s (ECB) rate announcement just 45 minutes after the Bank of England’s; so, call in now for the latest news and a live quote.

The euro was weak yesterday in anticipation of the expected ECB’s cut to interest rates today by 25bps to 0.75%. On the data front, final services PMI came in as expected; but, monthly retails sales figures were much better than expected posting a 0.6% growth showing a big improvements on last month’s -1.4% figure; but, did little to help the euro’s strength. Today’s bench mark 10 year Spanish bond auction will play an impact on the market; but, will play second string to the ECB rate announcement which could cause a lot of volatility. Call in now for the latest news and a live quote.

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