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Posted June 24th, 2013 by Charles Purdy

Lots of data, will sterling hold its own? | Smart Daily Currency Note

GBP/EUR – 1.1718

Sterling, though losing ground against a buoyant dollar, performed well against the euro following the news that the UK public sector net borrowing rose at a slower rate than anticipated in the last quarter. The National Statistics Office reported that borrowing rose to 10.5 billion pounds rather than the expected 13.8 billion pounds. The UK currency is performing steadily against its euro counterpart as core macro-economic data, such as last week’s robust Retail Sales and the improving housing market, support sterling. This has cooled speculation that Mark Carney will preside over more quantitative easing or interest rate cuts when he takes over the helm at the Bank of England next month though residual concerns do remain that his historically accommodative attitude to monetary policy could manifest itself should UK data worsen. Indeed, the disappointing Confederation of British Industry survey last week is a reminder that the recovery in this country is not completely assured and eyes will be on Wednesday’s inflation report hearing as well as the current account figures and final GDP reading on Thursday as we move towards the end of the month. Be in touch throughout for the latest developments.

The euro felt the effects of a resurgent US dollar strength on Friday as the rate dropped by over a cent during the day. Whilst data concerning the difference between the value of imports and exports came out favourably for the euro, this did little, if anything, to prevent a significant slide. With regards to influential releases this week, this morning we have business climate data from Germany and later on this week we will have more data from Germany including the change in unemployment and retail sales figures. As always, traders will pay special attention to data emanating from Germany due to its position as Europe’s biggest economy. The main other event this week will be the EU Economic Summit where the focus will be on economic policy and the completion of the EU’s economic and monetary union. Call in throughout the week for the latest rates and developments in euro value.

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