It was a topsy turvy day for sterling yesterday as the UK’s accounts and creditworthiness were hit upon by a leading credit rating agency.
Fitch, as we said yesterday, had warned that more stimulus put the UK’s AAA credit rating in jeopardy. This sent sterling lower in yesterday’s Asian session although the pound did regain some poise during the session as traders realised that Fitch’s comments were nothing new. We all know that the UK’s finances are in the toilet but I put the probability of a downgrade at less than 10%.
Due to the Fitch statement GBP was unable to take advantage of the weak ZEW announcement from Germany. The aftermath of the poor German confidence measure was limited however as the markets seemed to shrug it off.
The single largest piece of data from the UK this month is out today at 10.30. The Bank of England’s Inflation Report will outline the MPC’s latest targets for growth and inflation and through this probably the path of sterling for the next 3-6 months. If you follow us on Twitter at http://twitter.com/World_First you’ll be able to get up to the minute updates on what is happening to the pound throughout the announcement and know what we think will play out over the long term first.
Other than the Inflation Report we have UK unemployment at 09.30.
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Latest Exchange Rates At Time Of Writing
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Indicative Rates
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Sell
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Buy
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GBP/EUR
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1.1133
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1.1160
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GBP/USD
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1.6743
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1.6768
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EUR/USD
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1.5017
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1.5038
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GBP/JPY
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150.32
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150.65
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GBP/AUD
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1.7958
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1.7991
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GBP/NZD
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2.2568
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2.2601
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GBP/CAD
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1.7509
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1.7545
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NZD/USD
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0.7410
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0.7430
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GBP/ZAR
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12.30
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12.35
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USD/ZAR
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7.33
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7.37
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GBP/PLN
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4.6106
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4.6402
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EUR/JPY
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134.93
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135.19
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Rates are dependent on amount transacted. Please call 0207 801 9080 for a live rate quote.
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Please feel free to contact me (jeremy.cook@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar. If you would like to discuss your foreign exchange requirements, please contact our: Corporate Foreign Exchange Team on 020 7801 9050 or our Private Client Currency Exchange Team on 020 7801 9080.
To view any past or present currency blogs please click on the following link www.worldfirst.com/blog.
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Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.
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