By: Barbara Zigah
The common currency Euro fell to an almost 12-week low versus the Pound Sterling in London trading today, spurred on by the Euro’s softness vis-à-vis the continuing debt problems in Greece. Further adding to the Euro’s decline was recently released data from the United Kingdom showing that the deterioration of public finances was not as poor as had been expected by a poll of economists. Officials do confirm, however, that the 2009/2010 fiscal year was the worst Britain has seen since recordkeeping first began more than five decades ago. Reported at 10:30 a.m. (GMT), the Euro fell against the Pound Sterling, trading at 86.72 Pence, a decline of .2%; earlier it had touched on a low trade of 86.57 Pence, the lowest trade since late January 2010.
Analysts suggest that the Pound Sterling’s rise was driven, in general, by the Euro’s movements more than any singular event. According to a currency strategist at one Japanese bank, the U.K. data was relatively uninspired and had little direct effect on the currency. Investors will keenly watch the make-or-break debate tonight among the three primary contenders for U.K. political leadership; the general election will be held on May 6th 2010. A recent poll shows that the dark horse of the Liberal Democratic party, Nick Clegg, holds the lead. One of the topics sure to come up during the debate is the Pound Sterling joining the single currency Euro.