Sterling vs Euro rates down
Sterling started the week very low vs the Euro, but rose slightly throughout the day after credit rating agency Fitch said it was keeping its AAA sovereign rating of the UK with a stable outlook, adding the rating was underpinned by a high value-added, wealthy and flexible economy.
It said that the legacy of the financial crisis weighed on the economic and fiscal outlook but those risks were declining. Despite this rates are still very low due to a stronger Euro. The single currency was boosted by an unexpected deal to strengthen a euro zone bailout fund and a hawkish view on rates.
This caused strength for the Euro and cancelled out the gains Sterling made, meaning rates remain close to a 4 month low.
Progress this weekend may increase investor confidence that the EU authorities can sort out the crisis, which is good news for euro-based asset markets," said Kathleen Brooks, research director at Forex.com.
That is in contrast to the UK, where investors are pushing back expectations of a near-term rate hike. Markets are now pricing in less than a 50 percent chance of a rate hike in May, with a rate rise fully priced in for August.
Today's Data
We have UK house prices today, but most data is EU based. We see unemployment data and a survey which shows economic sentiment. From the US we see import prices, housing data and an interest rate decision by the FED.
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