The continuing uncertainty in the Eurozone and worries that the Bank of Japan will increase its stimulus measures has seen both currencies weaken against a basket of currencies.
The Japanese currency has fallen against all 16 of its major peers as investors predict that China and Europe will do more to bolster their economic growth, weakening the demand for haven currencies. The Euro has fallen to a new four month low against the dollar amidst concerns that the German chancellor Angela Merkel and French President Francois Hollande are on route for a showdown over growth and austerity measures.
As a result the pound saw a slight increase against the Euro but is expected to weaken slightly due to reports that UK inflation remains above the Bank of England’s target of 2%. The figure is lower than forecasted coming in at 3% rather than 3.5%.
Chancellor, George Osborne said; “This is a welcome relief to families with tight budgets, the Bank of England expects the inflation rate to fall in the next year or so.”
The Yen has weakened this morning following on from yesterday’s falls. Japan’s currency dropped 0.3 percent to 101.94 per euro, extending yesterday’s 0.7 percent decline. The euro depreciated 0.1 percent to $1.2804. It slid to $1.2642 on May 18, the weakest level since Jan. 16.
The yen has gained 6.3 percent over the past month as Europe’s debt crisis intensified the best performance among the 10 developed-nation currencies. The dollar is the second-best performer, appreciating 3.4 percent, while the euro weakened 0.2 percent.
The Pound to Euro exchange rate is currently trading at 1.236
The Pound to US Dollar exchange rate is currently trading at 1.578
The Pound to Australian Dollar exchange rate is currently trading at 1.596
The Pound to Japanese Yen exchange rate is currently at 125.8700
The Euro to US Dollar exchange rate is currently trading at 1.276
The Euro to Pound exchange rate is currently trading at 0.808