Speeches due today

As we all know Sterling has been suffering considerably over the last few weeks, culminating with the lowest rates we have seen against the Dollar for almost 3 years and the Euro for almost 2 years.

We then saw the Italian election take centre stage. The voters took decisive action and moved away from the two traditional parties in their droves, voting in large volumes for an anti-establishment comedian. This almost certainly means a coalition and probably a very unstable short term coalition, and most importantly an anti-austerity coalition. The markets have taken massive exception to this result and fears over what might happen to the Eurozone’s third largest economy have weakened the Euro significantly.

Today is a potentially huge day in the fight for currency supremacy. We will hear from the two biggest world central bankers – Ben Bernanke at 3pm and Mario Draghi at 5.30pm, and a member of the Bank of England’s MPC at 9.20am. We have the revised reading of UK GDP for 2012 Q4, and many other important data releases in the UK, Europe and the US.

The markets will be keeping a very close eye on all that happens, but from a Sterling perspective the GDP figure is all important – a 0.3% contraction is expected, which has already been weighing heavily on the Pound. If this does come to pass then their might not be too much reaction given “pricing in”, but if we see anything worse, then the Pound could restart its slide or on the flip side anything better could help give Sterling a bit of a boost.

The speech this morning from MPC member Bean, could be quite insightful as well – there has been much talk recently about the positive effect on the UK economy that a weak Pound could have, due to increased exports – could we see the Bank of England talking down the Pound again?

For those of you considering a currency purchase at this time I would ask only that you consider whether it is worth looking the Italian gift horse in the mouth or whether you want to gamble it all on some magic Beans.