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Posted July 2nd, 2013 by Charles Purdy

Sterling has a difficult start to the week | Smart Daily Currency Note

GBP/EUR – 1.1649

A good morning for sterling yesterday as ‘economic rock star’ Mark Carney took the reins at the Bank of England and Purchase Manager Index (PMI) figures exceeded expectations, showing growth in UK manufacturing for the second consecutive month. Market reaction to the release was fairly muted and sterling weakened through the afternoon to finish close to 1.1650 against the euro. Today sees further PMI data, this time from the Construction sector. After finally breaking into the positive last month, good news would certainly lend support to a struggling pound, but whether it will be enough to sterling remains to be seen. At the very least, expect volatility in the run up to these releases. Call your trader now to see how sterling is doing today.

The euro performed relatively well yesterday, gaining half a cent against the US dollar on the back of improved manufacturing PMI figures – in particular from struggling Spain and Italy. While they failed to break the near two year trend and still showed a contraction, the release was the best in 16 months and markets viewed it as perhaps the first small step towards recovery. Eurozone unemployment however was up on last month reaching record highs of 12.1% and it means today’s data showing the change in Spanish unemployment will be watched with greater interest than normal.  With little data released today, markets will look ahead to Thursday’s European Central Bank meeting as the key for this week. Get in touch with your trader now for the very latest on the euro.

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