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Posted May 24th, 2013 by Charles Purdy

Sterling has a tough week | Smart Daily Currency Note

This week                 (Last week)
GBP/EUR – 1.1661      (GBP/EUR – 1.1847)

Sterling has had a tough week, having dropped sharply against both the euro and US dollar since Monday, falling by nearly two cents at their lowest point. Yesterday however further slides were averted; bouncing back from the lower than anticipated inflation data and disappointing retail sales figures released on Monday and Tuesday respectively as the updated release of the GDP figures for the first quarter confirmed the economy had expanded at 0.3%. Home asking prices rose for a fifth consecutive month this week which also helped sterling. Monetary Policy Committee meeting minutes revealed Mervyn King had been outvoted again on the issue of increasing quantitative easing, though in light of lower inflation contributing to sterling weakness many expect incoming Governor Mark Carney to have more leeway to expand the asset purchase programme. Be in touch with your trader today for the latest information going into the bank holiday.

With bank holidays in Germany, France, and the Netherlands at the start of the week it has been a relatively quiet period for economic news emanating from Europe. The single currency held fairly steady against its major trading partners though as the region still struggles with economic and political instability weakness especially against the safe haven currencies is still expected in the longer term. The European Union Economic Summit in Brussels had mixed impacts on the markets, with monetary policy being highest on the agenda and ministers have been putting continuing pressure on the central bank to further support stimulus programmes. French and German monthly manufacturing and services data yesterday, although still showing overall contraction, came in slightly better than the previous month bolstering the euro towards the end of the week. Today sees the release of German Business Climate figures with the health of Europe’s economic heart pivotal in dictating currency strength across the seventeen nations. Call your trader now for developments going into the weekend.

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