Pound/Euro helped by a string of lower than forecast data
10 December, 2013
Monday was another day where sterling managed to come out on top, having jumped up in Asian trade and continuing to make a small gain over the day. It was small gains, almost looking a little flat but the charts certainly show an uptick against most of the majors.
Pound/euro was helped by a string of lower than forecast data releases across Europe. German trade balance missed the mark, as did the Sentix investor confidence reading for Europe. Greek GDP came in as expected at -3% whilst inflation figures came in low at -2.9%. Portuguese GDP was as expected but a minus figure and finally German industrial production missed expectations at -1.2% – all in all, pretty grim reading for the Eurozone.
Bank of England governor, Mark Carney made a speech to the Economic Club of New York where he argued that the UK recovery is gaining pace and there is a reduction in extreme uncertainty. But he also stated that “repeated optimism in forecasts of advanced economic growth” over the past years meant he was unsurprised that there were still pessimistic opinions over the UK’s growth rate. The markets seemed to take his comments well as the pound made a late rally.
Today is another day though and with the RICS UK house price data already out below the expected, the pound is trending to the downside. In just under an hour we have trade balance and industrial and manufacturing production figures, followed by Italian GDP, Greek industrial production and a speech by ECB president Mario Draghi, so watch out around lunchtime for some market movement concerning the Euro. There’s a few less key US releases scattered throughout the afternoon with the UK NIESR GDP estimate at 3pm. Although not the true reading, it gives a very accurate account of what it should be later in the month and can have an impact on sterling.
As always, make sure to keep in touch with your dedicated broker here at CI if you have a currency transfer to make anytime soon.
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