Pound Sterling drops against Euro.

Market Snapshot:



These are the live interbank rates as of 08:49am BST.


Yesterdays Trading
We saw rates from the pound to the Euro fall to the low 1.16's. The main cause of the drop was German Retail Sales figures. They were a little better than expected, which strenghtened the Euro and caused rates to fall.

The US Dollar actually fell yesterday also, following the ADP employment report. The numbers were weaker than expected.


UK Economy
Earlier this week, we saw very weak GDP figures which weakened the pound significantly. there had been renewed confidence in the economy, however the figrues dented that confidence.


However, we have seen that UK manufacturing activity shrank at its slowest pace for a year adding to hopes that the worst of the downturn is over.

The Purchasing Managers' Index from the Chartered Institute of Purchasing and Supply (CIPS) said the pace of decline in new orders continued to ease. And, for the first time in 15 months, the output index was positive, indicating increased production. CIPS said there were signs the sector may be coming out of recession.

The news suggests that after the sharp fall in GDP in the first three months of the year, the figures are likely to be better for the rest of the year, so as I mentioned yesterday, despite the downward spike for the pound, rates are expected to slowly recover throughout the year.


Sterling GBP / Euro EUR
Despite rates falling down to the low 1.16's today we have a fair bit of data from the EU that's likely to change things.


All the data is listed below, but the main things to look for are the unemployment figures the interest rate decision; it's likely that rates will be left at 1%, but there is an outside chance that rates may be cut.


If so, expect GBP/EUR to climb, however it is only an outside chance. A little after the announcement, we'll see the president of the ECB give a speech. His comments often have a further effect on the value of the EUR, depending on whether he is positive or not.


In the US, the non farm payrolls will be significant. As these figures are so hard to predict, the actual numbers are often way off estimates, and so it often causes volatility for USD. As regular readers will know, if there's a lack of confidence in the world economy as a whole, then the buying of USD can mean a weakening of the pound.


Finally
Before we list the data for today.... something one of my clients buying in New Zealand brought to my attention. Now, New Zealand si one of the most popular destinations for our clients that are purchsing property abroad is New Zealand. Air New Zealand has hit on a novel way to make sure even the most jaded expats making the long flight keep their eyes glued on its flight safety briefing.

The national carrier's safety video show pilot and cabin crew dressed only in body paint. But the safety message is kept seemly by carefully chosen camera angles. This got me thinking that there could be other ways to promote the currency reports here on my blog ........ however I am aiming for a readership of more than one, so have decided just to keep to my original plan of writing unique content to give an idea of where the markets may be going!


If you take safety seriously, then Click here to view the safety briefing.

Todays Data


EU
Producer Price Index
Unemployment Rate
ECB Interest Rate Decision
ECB President Speech


US
Jobless Claims

Nonfarm Payrolls

Factory Orders

Avg Earnings.


UK
PMI Construction


When you get in touch, ensure you mention you heard about foremost currency group through our Blog. Simply quote 'Blog'

Open a free Trading Facility

Open an online Trading Account


Email Me

Foremost Currency Group