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Posted May 17th, 2013 by Charles Purdy

Mixed week for sterling | Smart Daily Currency Note

This week                 (Last week)
GBP/EUR – 1.1847      (GBP/EUR – 1.1832)

Sterling started the week slowly with performance negatively affected by a buoyant US dollar and a UK trade report showing the country’s current account position to have continued to deteriorate. By midweek however, the UK currency climbed for the first time in four days as the Governor of the Bank of England’s last inflation report providing an upgraded forecast for the UK economy; indicating that growth could accelerate to 0.5% this quarter. More positivity came as unemployment claims were shown to have fallen, whilst yesterday more forecasts emerged suggesting that the economy will continue to grow at a faster rate coming into the summer than in the first quarter. With reasonable performance against the US dollar and euro going into the weekend, be in touch with your trader to see if sterling can maintain it’s upward momentum despite David Cameron struggling with support from his backbenchers in parliament.

The euro has struggled to hold its own this week, falling consistently against its major peers as its economy was shown to still be in recession, with production falling for the sixth consecutive quarter. While Germany grew by the smallest of margins at a disappointingly slow rate, France declared that it had fallen back into recession with output falling by 0.2%. Yesterday, the EU’s statistics office revealed that the region’s annual inflation rate declined to 1.2% in April; the lowest rate since early 2010 – leaving open the question of whether Central Bank President Mario Draghi will ease policy again after officials cut their benchmark interest rate to record lows. With little data released today from the Eurozone, call your trader today to get an update on euro price levels going into the weekend.

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