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Posted May 20th, 2013 by Charles Purdy

US dollar strengthens, UK awaits BoE minutes | Smart Daily Currency Note

GBP/EUR – 1.1821

Sterling struggled to hold it’s ground before the weekend, most notably against a strong US dollar, though with the Bank of England looking less likely to increase the level of quantitative easing for now, this decline could be short lived. Indeed one of the members of the Bank of England committee spoke on Friday about the risks inherent in increasing the asset purchase facility beyond its current target level without risking higher inflation. UK Consumer Price Index inflation data is released on Tuesday, the Bank of England meeting minutes are released the following morning and significant growth and retail sales figures on Thursday. Sterling remains vulnerable to poor data emanating from the economy but could find strength if growth and inflation remains in line with expectations set over the last week. Be in touch over the coming days with your trader for reactions and live prices.
The euro had a volatile day against sterling and weakened significantly against a particularly strong US dollar as indications the European Central Bank will continue to activate it’s easing programme over coming months continued. Meanwhile, a Governing Council member warned some regions in the eurozone may face a ‘decade of adjustment’ as the area struggles to get back on the path to growth. Looking ahead to this week, it will be a quiet day for data in Europe today as much of Europe enjoys a bank holiday in observance of Whit Monday. The EU economic summit on Wednesday may have an effect on euro strength as traders continue to look for hints regarding future ECB interest rates and on-going monetary policy plans. Monthly manufacturing data from France and Germany released on Thursday are scheduled to describe continued industry contraction, whilst German business climate data released on Friday may prove influential. Call in now for a live rate and further euro information over the course of the week.

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