Sterling exchange holds steady against euro

Foreign exchange prospects are looking up for the pound due to the currency holding a steady exchange rate against the euro over recent days.

Despite small negative changes and a drop against the dollar, sterling was trading at 1.10730 against the euro on the morning of December 14th.

Worries arose last week after it looked possible that the UK could lose its AAA credit rating on its sovereign debt, a move which would weaken sterling and the British economy as a whole.

But a report from Moody's credit agency reassured traders that there was minimal risk of this happening in the immediate future.

RBC currency strategist Adam Cole had previously told Reuters that the pre-Budget report looked set to "conspire against sterling far earlier than we had expected".

He then revised this forecast and stated that euro/sterling could rise to 93 pence in early 2010.

The gentle rise in euro exchange rate comes after a continued drop in rates through November as the UK struggled with the effects of the recession

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Posted by Sarah Jackson