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Posted October 29th, 2012 by Charles Purdy

GBP/EUR Rates and Comments for 29th October 2012 – Finally some good news for sterling

GBP/EUR – 1.2444

After the gains made on Thursday, sterling remained fairly range bound on Friday, although it did drop below the key support level of 1.61 against the US dollar in reaction to the strong GDP data coming from the United States. Expect nervousness this week as the world gears up for a potential changeover of power on the other side of the Atlantic. The pound may continue to perform relatively well following the good GDP data from the UK last week as Britain begins to appear a safer option in an increasingly risk averse market. Manufacturing and construction Purchasers Managers Index (PMI) figures are released in the latter part of the week and will be closely monitored by investors as poor data could indicate that last week’s GDP figures were mainly down to the ‘Olympic effect’. If this is so, expect to see a harsh reaction as traders lose faith in the legitimacy of the UK economic recovery. Please call in for the latest rates and to discuss your requirements with your trader.

The euro had a poor day on Friday as Standard and Poor’s (one of the big 3 credit rating agencies) downgraded a raft of French banks and Spanish unemployment reached fresh highs of 25% making it ever more likely that they will make a formal request for a full government bailout. On a more positive note, German consumer climate figures were better than expected; but, this had little effect on the euro’s relative strength. Problems in Greece and the delays surrounding the potential Spanish bailout are likely to dominate the headlines in Europe this week and any significant news will cause a lot of volatility in the market. This week, manufacturing PMI data will be released across Europe, we will have benchmark 10-year Italian and French bond auctions and the President of the European Central Bank (ECB) is also speaking. Call in now for the latest news and changes in the euro rate.

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