Currency Exchange UK

 

Sovereign Risk in Eurozone Weighs on EUR/GBP

Sovereign Risk in Eurozone weighs on EUR/GBP

Concerns over the UK economy were outweighed in this morning’s currency trades, by continuing worries on Greece’s debt problem.  This lead the pound to stray strong against the weak euro – by 9AM GMT the euro was trading at 86.75 pence.

Currency experts predict that the euro/sterling pair will move towards 85.50 pence in the medium term.  This prediction gains support from the lack of clarity over aid for Greece from other Eurozone countries.

Against the US dollar, the pound didn’t move much, down 0.1 per cent at $1.5655.

Currency traders watching the pound will be keen to hear the latest Bank of England minutes, due out on Wednesday. 

They will be looking for an explanation to Governor Mervyn King’s comments last week that it is too early to rule out another introduction to QE.

Meanwhile inflation figures will also be announced this week and many expect that the CPI (Consumer Prices Index) will be down 0.1 per cent ‘month-on-month’.