Weak jobs data hurts Sterling
Yesterday the office for national statistics (ONS) showed that more than double the amount of people claiming jobless benefit that forecasts had suggested. This shows that the UK recovery is still on very shaky ground, and as a result Sterling dropped against nearly all major currencies.
Sterling Euro rates rise
Against the Euro however GBP/EUR rates rose due to fears over Greek debt. It's to do with the EU banking system; Moody's the ratings agency said it was going to review the ratings of French banks, due to their holding of Greek debt. This weakened the Euro significantly, pushing exchange rates up despite the fact that the pound weakened yesterday.
Pound vs US Dollar
Inflation rose in the US last month, and this pushed market sentiment up strengthening the US Dollar. This compounded the weak pound and GBP/USD rates have fallen sharply into the $1.61's.
Today's data
The main data is UK retail sales, which if poor could hurt the Pound. We also have various inflation measures from the EU, so we think the gains in GBP/EUR will be short lived and could resume it's downward trend if EU inflation is high, supporting the view for an interest rate hike.
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Labels: EU Inflation, Greek debt, Retail Sales, UK Jobs data