Good news fails to help Pound

22 October, 2012

Robin Haynes

A surprisingly good set of UK economic figures last week failed to help the Pound, as the EU summit paved the way for more fiscal union in Europe and sent the price of the Euro higher.

In a worrying week for the direction of sterling, better-than-expected unemployment, public borrowing, inflation and retail sales figures all failed to halt a slide for the Pound, which lost ground against the Euro and US Dollar through the week, amongst others.

The Eurozone now looks likely to appoint one regulatory body for the single currency bloc’s much maligned banking sector as early as next year, in a sign of strength and determination which increased the cost of the Euro. At the same time, increased fiscal union in Europe could spell disaster for Britain, with the key London financial services sector at risk from two-tier policy decisions in Brussels. So perhaps it is no wonder that it is getting more expensive to buy Euros as the market adjusts to the latest developments.

This week we have the first reading of UK GDP on Thursday. The British economy is widely expected to have emerged from recession – just – but if we see a disappointing figure and a continued recession on Thursday, sterling is plainly at risk of further losses.

We are also due interest rate decisions and statements in Canada, New Zealand and the USA, which also announces GDP on Friday. We could be in for some movements across all currencies this week, so whatever currency you are looking to transfer in the foreseeable future, get in touch with us at Currency Index for the latest news, views and a free quote.