German figures due out

19 February, 2013

Graham Harborne

With little data out yesterday and a public holiday in the states the currency markets were probably the quietest they have been for some time, which bought some relief to those sterling sellers out there who had seen the pound fall dramatically last week. Today again is quiet from the UK point of view but there is the ZEW sentiment survey out this morning for the eurozone’s largest economy Germany, and any negativity could see both the pound a dollar claw back some of its recent losses against the euro.

The key event in the UK this week will be the release of the BoE minutes from this month’s meeting, due out tomorrow. The pound has been under severe pressure throughout 2013 with only a slight recovery seen at the beginning of the month. Matters weren’t helped at the weekend when comments made by BoE policymaker Martin Weale added fuel to the fire that a weaker pound will help the UK’s growth. Mr Weale said that furthering weakening of the pound will help boost exports as goods will be cheaper. Add to this a raft of negative economic data releases and the threat to the UK’s solid triple-A credit rating , things look pretty gloomy for the pound. Although it all sounds bad let’s not forget that both the US and eurozone are from out of the woods so don’t be surprised to see the pound rally on the back of any negative reports from these economies.

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