The pound euro exchange rate is 0.279% higher on the day with GBP to EUR at 1.1427. The pound dollar exchange rate is 0.828% lower with 1 GBP = 1.5451 USD. The pound Australian dollar is 1.128% higher with 1 GBP = 1.5549 AUD. Value in the British Pound is being driven by a renewed sense of risk avoidance currently guiding global markets. The riskier euro finds itself a loser in this scenario courtesy of the fact that a significant portion of this risk lies with the Eurozone debt crisis. The US dollar on the other hand is a winner; the currency is so vast and liquid it is often turned to as a safe haven in such conditions. Looking at the pound euro exchange rate we see that the prospect of more QE in the UK saw the pound slide further against the euro yesterday. The Bank of England’s rate-setting committee revealed that UK growth in the second half of this year is likely to be “materially weaker than forecast in August.” The minutes also indicated that a move towards additional UK quantitative easing “was finely balanced for most MPC members” and that “it was increasingly likely that [it] would be warranted at some point.” With QE looming then, the market took its cue to punish the pound. Although attention for once was focused outside the eurozone, the euro fell out of favour in overnight training as a result of the Fed’s statement. This helped sterling recoup a little ground but it remains at low levels around €1.14.

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