18-month high for sterling currency exchange rate

The currency exchange rate for the pound reached an 18-month high against the euro yesterday (June 24th).

According to analysts, the good rate of exchange was prompted by the chancellor George Osborne's emergency Budget.

Investors' confidence was restored in sterling following the austerity measures announced by Mr Osborne.

In addition, the record insurance costs of protecting Greek government bonds against default also served to hold down the euro's value.

Paul Robson, currency strategist at RBS, told Reuters: "It's all about the aftermath of the new UK coalition saying and doing the right thing about the budget deficit."

Moody's rating agency reassured investors further as it said on Wednesday that the UK was to keep its triple-A currency rating so long as the government was sure to implement the cuts announced in the Budget.

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Posted by Chris Barber