We have started this morning’s trading session with a huge jump for Sterling vs the single currency creating some better opportunities to buy Euros with Sterling this morning compared to the close on Friday.
In what has been an extremely volatile month so far for Sterling Euro exchange rates we have seen the most recent data releases for the British economy as negative.
Retail Sales, manufacturing and industrial production have all come out lower than expected and with the fears of a Brexit mounting the UK is in an uncertain place.
The markets have likely moved in an upwards direction following the over reaction that occurred last week but I do suspect that today’s increase is limited and that we’ll see 1.30 tested again during the week.
UK inflation data is due out tomorrow morning and with oil prices hitting below USD$30 per barrel this is having an adverse effect on Sterling owing to the revenue generated by the North Sea oil industry.
I think inflation will continue to struggle and tomorrow’s release is likely to reinforce this view that I have and its potential negative impact on Sterling Euro exchange rates.
Eurozone inflation is also published tomorrow and this will provide an indicator as to how well QE is performing in the Eurozone.
Indeed, since QE was extended in December Sterling Euro rates have dropped by as much as 12 cents.
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