UK recession deepens
25 May, 2012
Yesterday was all about the UK GDP figure, the second reading for Q2 2012. The first reading had shown we were technically in recession and despite this the pound had held its own against the Euro with the zone in crisis. Of late the pound had slipped against the USD as investors retreat from riskier currencies and stockpiled the safe haven dollar.
The reading came out at 9.30am, and despite expectation for no change, the final revision came in lower at -0.3% for the quarter and for the first time since 2009, the year on year figure posted a negative too at -0.1%. What was to come was a rocky day as the pound steadily lost ground across the board, all except against the Euro where losses were capped for most of the day. As often we have seen this past week, with the Eurozone in such turmoil even the poor GDP figure couldn’t stop the pound gaining back as trade concluded. So still we have trading levels against the Euro near to the 3.5 year high buyers have enjoyed lately. With many worried about the rising problems in the EU countries, at Currency Index we have seen an increase in those expats selling property and repatriating the funds to the UK. If this is the case for you, then it’s worth noting the recent trends and strong sterling against the single currency. A forward selling contract might be the way forward for locking that exchange rate in one of the dips in trade in order to maximise returns.
The greenback, as mentioned continued to rally against the pound yesterday gaining another cent to add to the 6 cents already gained over the past 10 days. Investor sentiment is low the crisis in Europe develops daily and with the UK previously being favoured as the safe bet, the thought of recession, reduced growth forecast and the chance of further QE has changed that thinking. The pound is now wide open to negative sentiment and data releases which recently its seemed immune too. As the week comes to a close today and we enter the final few days of the month will the pound hold up or will investor sentiment continue to push sterling lower?
Today is very light on data with only a German consumer confidence survey to digest and across the pond the Reuters consumer confidence index later in the day. As news that Bankia shares in Spain have been suspended this morning ahead of an expected bailout call from the bank to the Government it could be another jumpy day for the Euro, but as we know these markets are very unpredictable so only time will tell!
- 2020 (59)
- 2019 (190)
- 2018 (229)
- 2017 (253)
- 2016 (254)
- 2015 (253)
- 2014 (252)
- 2013 (287)
- 2012 (270)
- 2011 (576)
- Brexit deal to be done, or going, going, gone? 25 November, 2020
- Sterling starts the week down from the highs of last week 16 November, 2020
- Votes are in – albeit still being counted, will Donald trump Joe? 4 November, 2020
- No categories