The Euro to Pound Sterling (EUR/GBP) exchange rate was trading in the region of 0.70 on Tuesday as concerns over Greece and the success of the Podemos movement in Spain weighed upon the single currency. The Euro to US Dollar (EUR/USD) exchange rate fell to a one-month low following positive US data.
The Euro to Pound Sterling (EUR/GBP) exchange rate hit a session low of 0.7062
Worries that Greece will fail to repay €1.6 billion to the International Monetary Fund (IMF) saw the Euro come under heavy selling pressure.
If no deal is reached between Athens and its creditors before June 5 the nation will default. A scheduled round of talks was amazingly postponed despite the deadline rapidly approaching. In its place was a telephone conference.
‘The money won’t be given; it isn’t there to be given. It is clear the June payments to the fund cannot be covered without external financing. We won’t accept blackmail that says it’s either liquidity with a memorandum or bankruptcy,’ said Greek interior minister Nikos Voutsis.
The Euro was also under pressure as the anti-austerity party Podemos gave Spain’s ruling Popular Party (PP) a bloody nose in local elections. The PP suffered its worst poll result in two decades and lost 5 million voters.
Retail sales supports Pound Sterling (GBP) exchange rate
The Pound Sterling meanwhile was continuing to receive support from last week’s positive retail sales data and a report released by the Confederation of British Industry (CBI), which showed that UK retail sales growth will grow strongly over the coming months.
‘Low inflation, which we expect to remain below 1% for the rest of the year, has given household incomes a much-needed boost and greater spending power. Overall, the outlook is bright for firms on the High Street, but challenges still remain, especially for food retailers, who are still feeling the heat of stiff price competition from new entrants to the sector,’ said Rain Newton-Smith, CBI’s director of economics.
Euro to US Dollar (EUR/USD) exchange rate hit a session low of 1.0883
The US Dollar continued to strengthen as economic data added to last week’s comments by Federal Reserve Chair Janet Yellen who suggested that interest rates will rise before the end of this year.
Data released today showed that the number of new homes sold in the US rebounded strongly in April and consumer confidence increased more than forecast.
Further gains were held in check by softer-than expected Composite and service sector PMI reports.