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Posted May 28th, 2013 by Charles Purdy

Will sterling continue its downward trend? | Smart Daily Currency Note

GBP/EUR – 1.1692

Sterling had a more positive day on Friday, recovering a little of the ground lost earlier in the week and indeed some analysts are starting to suggest the Bank of England may be looking to slowly move away from their easing cycle, which could help sterling retrace it’s decline from earlier this year. Fresh evidence emerged on Friday that the UK housing market recovery is underway with mortgage approvals rising by 2.4% through April, though this remains below the levels seen before 2008. The report said that the government’s Funding for Lending scheme continues to support the market – particularly for first time buyers. This coming week will be relatively quiet for significant UK economic releases; with only data showing the net lending to individual and realised sales figures expected to be released alongside comments from several members of the Bank of England. Perhaps no news will be good news and sterling can bounce back from recent lows as speculation increases as to tighter monetary policy. Contact your trader to find out whether sterling can find momentum.

The euro found strength before the bank holiday after an industry report revealed that German business confidence increased beyond expectations though May – increasing optimism for the region’s recovery prospects after German and French manufacturing data emerged more positive than expected last week. News from Germany will be dictating the currencies performance once again this week with preliminary inflation figures and unemployment change data due on Wednesday. Spanish and Italian benchmark ten-year bond auctions will be a gauge of investor confidence in weaker economic zones whilst German and French retail sales and consumer spending reports are published on Friday. Other notables releases this week includes Eurozone wide inflation data as well as figures showing the overall level of unemployment across the Eurozone – currently expected to have increased to 12.2%. Stay on top of how the euro is performing by calling your trader now.

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