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Posted July 26th, 2012 by Charles Purdy

EURO/GBP Rate & Comments for 26th July 2012

EURO/GBP – 1.2736

Sterling had an extremely poor day yesterday, losing 1 cent against both the euro and the US dollar whilst weakening off against the majority of other currencies as much worse than expected preliminary GDP data was released. The figures are ominous for the state of the UK’s economy depicting a contraction of 0.7% when only 0.2% had been anticipated. 3 straight quarters of negative growth makes this the worse double-dip recession since the Second World War and has led to many economists predicting that another round of Quantitative Easing could be implemented in the up and coming months. The preliminary figures are often disputed by a raft of economists who expect a better reading when the figures are revised next month; however, even if the figures are revised upwards, the best we can realistically hope for would be a dismal flat reading of 0.0% which underlines just how weak the economy is. On a more positive note, business confidence levels have reached the highest levels since 2010. With very little data out from the UK today, the markets will look to the US and to news from Europe for influence; so, call in now for the latest news and a live quote.
 
The euro was relatively strong yesterday after one of the members of the European Central Bank (ECB) suggested that giving the proposed European Stability Mechanism (ESM) a banking license may go some way to help the Europe debt crisis by giving it access to cash from the ECB and in turn meaning there would be greater funds available to bailout struggling nations. The news provided some relief to the markets with Spanish bond yields dropping slightly after reaching fresh highs; however, the fundamental problems the Eurozone faces still remain. On a more negative perspective, the German business climate figures released were much lower than expected. Today, German business climate figures, Euro-wide money supply and Italian retail sales figures will be released, whilst the ECB President is also speaking. Call in now for the latest update and a live quote.

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