Euro Exchange Rate News

Spain helps Euro hits Four-Month High against Pound

Despite its recent troubles the Euro was able to soar to a four-month high against the British Pound and a month-high against the US Dollar on the back of positive developments in the 17 nation Eurozone.

Whilst positive US data and weakened demand for safe-haven assets contributed to the Euros upward trajectory it was Spain retaining its investment grade credit rating which really pushed it higher.

Against expectations, top ratings agency Moody’s Investors Service did not relegate Spain to the below investment grade rating imposed on fellow struggling Eurozone nations Greece, Cyprus, Portugal and Ireland. Spain’s creditworthiness has been a real cause for concern in recent months. Confidence in the nation was further shaken after Moody’s fellow ratings agency Standard & Poor’s downgraded Spain’s rating to one level above junk status at the beginning of October.

Moody’s leaving Spain’s investment grade unaltered has come as a much needed boost.

Moody’s asserted that the European Central Bank’s pledge to buy indebted nation’s debts had substantially reduced the risk of Spain being denied market access and the country was therefore able to keep its investment grade rating.

Kathrin Muehlbronner, an analyst with Moody’s, commented on the expectation of Spain seeking defence in the form of a credit line from the European Stability Mechanism. If this occurred the nation would then ‘be able to activate the ECB purchases in the secondary market’.

Although Rajoy has frustrated investors with his reluctance, many are beginning to regain their confidence and feel that a sovereign bailout is in the offing.

 

As of 10.05 am:

The Pound to Euro exchange rate is currently trading at 1.2331

The Pound to US Dollar exchange rate is currently trading at 1.6149

The Pound to Australian Dollar exchange rate is currently trading at 1.5659

The Euro to US Dollar exchange rate is currently trading at 1.3097

The Euro to Pound exchange rate is currently trading at 0.8109

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