Sterling has founds some support in this afternoons sessions as the Euro fell euro fell after the Ifo Institute’s measure of German business confidence declined, damping demand for the single currency. The euro extended losses as European Central Bank President Mario Draghi said the Euro Zone’s crisis isn’t over and it was also reported that European Commission official Antonio Tajani as stated the currency was too strong and Bundesbank President Jens Weidmann said discussing further stimulus wasn’t out of the question. This could put pressure back on the Euro and I am still confident Euro buyers will find support longer term, however it is also clear to see that the pound is coming under some pressure with some softer data sets of late.
Looking at the rest of the week Thursday’s UK retail sales figures will be keenly viewed and will go hand in hand with Fridays important GDP release. Retails sales are expected to post a sharp decline and GDP forecast to fall from 0.8% to 0.7% – any deviation from the expected and the pound could come under pressure heading towards the end of the week. In short if you are buying Euros this week then todays moves could be an opportunity, Euro sellers may well see more value come Friday.
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