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Posted June 18th, 2013 by Charles Purdy

All quiet before Federal Reserve Wednesday | Smart Daily Currency Note

GBP/EUR – 1.1744

A steady day for sterling yesterday, trading in a tight range against both the US dollar and euro as markets look ahead to today’s inflation figures. We anticipate an increase of 0.2% on last month’s figure of 2.6% which means that it still way ahead of the Bank of England’s 2.0% inflation target. The Governor and Members of the monetary policy committee will give evidence afterwards on inflation, interest rates and the economic outlook. The hearing lasts a few hours, so can create great volatility over that period of time. Call your trader today to find out which way rates are moving.

Euro trended in a narrow range yesterday against the USD and GBP, with little news out of Europe along with traders being cautious leading up to the Federal Open Market Committee projections and statement on Wednesday. Europe’s trade surplus did narrow to €16.1 billion from €18.1 billion in March which was positive but the German Bundesbank did warn that signals showing a slowdown in growth in Europe are appearing.  Amidst this struggle for a return to growth, the European Central Bank (ECB) may be pressured to adopt more outlandish measures over the coming months. For example, we may see an increasing number of bank officials support a negative interest rate policy. Today all eyes will be on the ECBs President Draghi’s speech along with German Economic Sentiment data. Throughout yesterday and today we have the G8 meetings taking place in the UK. Get in touch for the latest updates.

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