The pound is trading down against the Euro this morning whilst remaining stable vs. the USD. Concerns are intensifying over the state of the UK economy which is likely to push the Bank of England into printing more money to stimulate growth once again. MPC member Posen, confirmed this theory by stating in a speech yesterday that Britain’s economic outlook had improved slightly but more quantitative easing would be needed. In recent economic news public sector borrowing was more positive than expected at 10.8B, lower than the forecasted 12.4B. Mervyn King the head of the BoE is due to speak tonight in Brighton.
The Euro is trading strongly this morning against the pound and has managed to touch 1.30 against the USD benefitting from hopes of an eventual deal to restructure Greek debt despite euro zone finance ministers’ rejection of a debt swap offer by private creditors. In recent economic data German and French manufacturing and service sector data came in better than expected seen as positive for the Euro zone in addition to industrial new orders dropping by less than forecast.
Confidence in the currency markets helped by better economic data in the US has aided riskier currencies with them gaining support against the USD, with the euro touching 1.30 and the pound staying within 1.55 against the US currency. There is only one small piece of US manufacturing data due today as tomorrow brings a juicer one in the afternoon with the release of pending home sales and the FOMC (central bank) announcement.