Good morning. After weeks of decline, Sterling made a modest comeback last week, pushing up from a low of 1.1475 breaking 1.18. In today's report I'm going to go into detail on what caused rates to bounce back, and also look at what the coming weeks may hold. If you are keen to know what is moving the market, in order to try and get the best exchange rates, then read on.
In this week’s Report:
- Pound/Euro makes modest recovery
- UK GDP estimate better than expected
- Mario Draghi talks Euro down helping GBP/EUR
- Round up of the week’s other data that may affect rates
Sterling vs. Euro;
Essentially this calls on the old cliché “Markets hate uncertainty”. Under Rajoy’s stewardship Spain has placated much of the negative press it garnered towards the end of 2012. Spain were largely expected to subscribe to the ECB’s bond-purchasing program by the end of 2012 which aimed to intervene in their growing borrowing costs; yet, they have so far been largely self-sufficient, more so than Greece for example, and his resignation would threaten the current stability which aided a stronger single currency.
Incoming BoE Governor helps boost Sterling
ECB President weakens the Euro
UK Growth not as bad as expected
Not only this, but the euros recent appreciation has largely been built on rhetoric rather than any concrete data. Although Greece’s Finance Minister has suggested that they could begin the road to recovery by the end of the year, this remains to be seen, and if there was a cut to interest rates to stimulate the European economies, or more negative press, we could see the euro weaken again.
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