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Posted June 21st, 2013 by Charles Purdy

Difficult week for sterling especially against the dollar | Smart Daily Currency Note

(Last week)                  This week
(GBP/EUR – 1.1761)     GBP/EUR – 1.1719

A difficult week for sterling especially against the US dollar and to a lesser extent against the euro. This contrasted with sterling gaining  ground when compared to the commodity backed currencies. Thursday saw the release of better than expected retail sales data which gave some support to sterling yesterday, helping the UK currency to stabilise after Wednesday’s losses. Sterling traded within a relatively narrow range against a surging US dollar whilst posting modest gains against the euro. However, it remains to be seen if sterling will be able to hold its ground against the dollar as the Monetary Policy Committee’s uncertainty is now in stark contrast to the Federal Reserve’s newly assertive attitude towards quantitative easing strategy. The only UK news with the potential to directly affect sterling performance today is the release of public sector net borrowing data, which will show the difference between income and expenditure in the public sector during the month of May. Call in now to see how sterling prices react to continuing dollar strength ahead of Mark Carney taking over as the Governor of the Bank of England next month.

The single currency has performed well for much of the week, but after rising to a four month high against the US dollar the euro lost ground in many pairings following poor German manufacturing sector data. Though many areas of the report outperformed (and despite better service sector figures and evidence of slower decline in new business) the composite output index still described manufacturing activity shrinking overall. French manufacturing results similarly showed a contraction though not to the extent many had anticipated, with the euro losing around half a cent against sterling. With only news on the European current account balance today there is going to be increasing pressure on Mario Draghi and the European Central Bank to find innovative ways of stimulating the economy. The question is, what can turn the tide and get the euro back on an upward trend. Call your trader today for the latest news and the best live prices on your euro trades.

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