GBPEUR exchange rates fell today to the lower end of the range of recent trading following the release of EU Industrial Production data. The figures came in much higher than expectation which saw the Euro strengthen by 0.5% against Sterling and by 0.7% against the USD. Yesterday’s news about Cyprus receiving its recent bailout of €2bn by the European Stability Mechanism meant that confidence has slowed returned in the short term to the Eurozone which is another reason why we have seen Sterling fall against the Euro this week.
Tomorrow sees the release of EU GDP data for both year on year and Quarter 1. We also hear about the figures for the countries involved in the Eurozone so it will be important not only for the entire Eurozone but keep a close eye on Germany, France and Italy as a barometer for the economic area.
We also have the UK’s Quarterly Inflation Report at 930am and you should follow this closely as it will provide hints as to whether further Quantitative Easing may be necessary in the next few months. Personally, I think until Mervyn King is replaced by Mark Carney in July it is unlikely that we will see any further intervention from the Bank of England.
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