15 February, 2013
Yesterday saw the anouncement that the Euro zone economy shrank by 0.6% in the 4th quarter, which quickly saw the single currency drop to 3 week lows against the dollar and lose all the ground it had gained against sterling the previous day (a cent). This data release will be welcomed by many following the 6% losses of the pound versus euro since the new year and could potentially see a small shift in market confidence away from the seemingly unstoppable euro. Meanwhile, the US dollar remained fairly strong making more ground against the pound, helped by the weakness of the euro. It’s traded at a flat rate overnight through Asian trading so whether it can make more ground against the pound and euro today will likely be led by Eurozone data this morning and later on when the US market opens.
Today we have UK retail sales for January, so we’ll have to see if consumers took advantage of the bargains in the sales. Consumer confidence on the high street is a good sign for the economy so any increase in the expected figure is likely to give the pound grounds to push on from yesterday, although beware if the figure comes in below forecast then the gains are more than likely to be reversed.
EU trade balance follows the retail sales and then in the US we have a varied release of data including industrial production and NY manufacturing index.
Markets remain volatile and the pound is likely to remain under pressure while talk of high inflation and slow growth continue to dominate. If you have a currency purchase to make in the coming weeks, ensure to stay in contact with your broker here at Currency Index in case there is any spikes in the rates. Up trends are seemingly short lived so far this year so being prepared to trade could see you save a few thousand on your transfer.
Next week we have a few important data release in the a week that starts with a the US Presidents Day holiday so dollar buyers could see some potential weakness to take advantage of there. Later in the week UK Bank of England minutes are released giving further insight into the recent policy meeting and unemployment figures, whilst in Europe there is consumer confidence stats and inflation data and FED minutes from across the pond.
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