Euro pound exchange rate battles back after earlier losses

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It has been an interesting day on the currency markets generally, "With no meaningful news on the calendar the currency market looks like it wants to correct some of the excess moves of the past several days," says Boris Schlossberg at BK Asset Management.

Commonwealth Foreign Exchange Inc, in a briefing to clients, say the British pound remains well supported:

"The pound rose back toward its highest level since mid February against the greenback, broadly supported by data showing a drop in the number of Britons claiming unemployment benefits.

"The UK’s claimant count fell by 8,600 in May, which was slightly better than the forecast for a drop of 5,000. It was the latest in a growing list of economic reports that have highlighted a surprising improvement in the U.K. economy and have lowered the risk of additional Bank of England monetary easing. More data that shows the U.K. economy has bottomed should continue to support the pound."

The euro pound exchange rate is currently seen taking guidance from the larger euro / dollar exchange rate pairing in the afternoon session in London.

The euro remains well supported according to Greg Moore at TD Securities who does however mention he sees EUR weakness in coming months:

"The EUR has pulled back modestly after reaching a high of 1.3335 overnight, and is currently testing trend line support near 1.3265/70.  If broken, that could open up to a test of 1.32 initially.  More broadly we remain bearish on the EUR in the coming months."

The longer-term bearish euro view held by Moore is echoed over at Lloyds Bank who have told us today they see the euro weakening towards the end of the year.