The fact that the Pound has continued gaining versus the single currency this morning perfectly illustrates the inherent weakness in the Euro.
The Pound Dollar exchange rate is 0.332% higher with 1 GBP = 1.4503 USD.
The Pound Euro exchange rate is 0.390% higher with 1 GBP = 1.2127 EUR at 1:15 PM in London.
The Euro Dollar exchange rate is 0.058% lower with 1 EUR = 1.1959 USD.
"The British Pound has continued its upwards momentum against the Euro this morning, rising to a high of 1.2132 in early trading, despite comments from the Prime Minister David Cameron, who seems to be preparing voters for the deepest public spending cuts since Margaret Thatcher's reign," says Adam Solomon at independent exchange rate brokers Tor FX.
The Chancellor of the Exchequer George Osborne is due to deliver his emergency budget on the 22nd June and Cameron's comments yesterday will speak concern that the black hold in UK public finances will require severe spending cuts.
Solomon goes on to say:
"The fact that the Pound has continued gaining versus the single currency this morning perfectly illustrates the inherent weakness in the Euro, which has also fallen under $1.20 versus the Dollar to the lowest level in four years.
"European stocks have fallen again this morning, while the FTSE 100 Index has also retreated, amid escalating concern that the sovereign debt crisis engulfing much of Europe will spread and slow the global economic recovery."
Chancellor Angela Merkel has this afternoon said that Germany needs to save €80 billion through 2014.
Finance ministers from the 16 countries that use the euro will lay out plans to cut public spending as they seek to calm jittery markets amid worries that the region's debt crisis is spreading.
Hungary, which is not part of Europe's currency union, has seen its currency slide after some government officials warned the country is close to default — two years after it received a bailout from the European Union and the International Monetary Fund.
Hungary's government has tried to downplay those comments, which have nevertheless kept the euro trading near the four-year lows it hit Friday, when it went below $1.19 for the first time since March 2006.
