Czech-ing Out The Currency Markets

Sterling however weakened against the US Dollar and gains were limited against the euro as speculation mounted that the Bank of England would increase their quantitative easing programme at next week’s MPC meeting.

We can expect another topsy turvy week with UK GDP figures due out, likely to confirm that the UK is in a double dip recession, and the build up to the EU summit where yet again ministers will try to come to an agreement of how to solve the worsening eurozone crisis. Cyprus were forced to seek help yesterday fearing they are going to be affected by the worsening problems within Europe, Spanish yield continued to rise and Moody’s downgraded 28 Spanish Banks so all in all a pretty bad day for the euro and although sterling gained the US dollar was the main winner gaining over ½ % against the poor performing euro.
Given that the Eurozone debt woes have not shown any signs of improvement, the results from the forthcoming EU summit might be disappointing. Analysts said the risk of disappointment is likely to exert more downward pressure on the euro.

“The risks facing the euro are greater than sterling. So I think sterling may outperform the euro, but it may underperform the dollar,” Jane Foley, senior currency strategist at Rabobank, said.

Today we have UK Public sector Net Borrowing figures out at 9.30am followed by the Inflation Report Hearing which will be accompanied by a speech from Mervyn King. This could well put some pressure on the pound as votes at this month’s MPC meeting showed that a call for further quantitative easing was very much a close run thing.

With England out of the Euros (no surprise there) focus has turned to Wimbledon, will we see the first British champion since Fred Perry ? I doubt it !!! There was however joy for Heather Watson yesterday when she became the first British women to win on centre court since 1985, beating world ranked 55 Czech opponent Iveta Benesova. Though Iveta Benoesova may not need too change to many pounds into Czech Koruna anybody who does have such a requirement should follow this link and get in touch with your broker at Currency Index.