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Posted May 25th, 2012 by Charles Purdy

EURO/GBP Rate & Comments for 25th May 2012

EURO/GBP 1.2473

A busy week for the UK saw sterling strengthen against the euro; but, weaken against the US dollar as risk aversion drove the market. Revised GDP data confirmed that the UK is officially in a “double-dip” recession with the latest figure showing a contraction of -0.3%. Retail sales figures were also much worse than expected revealing a -2.3% drop when only a -0.8% figure was expected. The International Monetary Fund (IMF) stated that the UK needs to consider injecting more money into the economy and potentially cutting interest rates to stimulate growth; however, despite this, the Bank of England’s policy meeting minutes revealed that the MPC members voted 8-1 to keep quantitative easing unchanged. All in all, a very negative picture of the state of the UK economy; so call in now to speak to one of our traders for the latest news and a live quote.

The euro weakened to a 22 month low against the US dollar this week as investors continue to flee the single currency due to the fear of a potential Greek exit and the ramifications that could follow. The Organisation for Economic Co-operation and Development (OECD) downgraded the growth forecasts in the EU and for Spain and Greece in particular. Furthermore, rumours started to circulate that EU policy makers have now started to put contingency plans in place for a potential Greek exit. German and Euro wide manufacturing PMI was worse than expected; moreover, German business survey figures were well below market expectations underlining the negative sentiment in the region. With the markets in turmoil due to the uncertainty surrounding Greece’s future; we will have to see if there is any respite for the euro in the coming weeks. Call in now for the latest news and a live quote.

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