Sterling has continued to be under pressure recently and has hit near record lows against both the EUR and the USD. These falls have been down to the UK’s economic situation which has been weakening, plus concerns over the future continues to weigh down the Pound’s value.
The Pound has struggled against a negative market perception for some time now and despite some better than expected data late last week, it has struggled to make any significant impact against the EUR and USD.
The Euro has continued to outperform expectations. This is expected to continue.
The recent strength comes from positive economic data and the European Central Bank’s hints to tapering their economic stimulus. The ECB may be forced to reconsider changing their monetary policy near term, in a bid to cap any further gains from the Euro. This may cause the Euro to weaken.
The US Dollar managed to advance against the Pound at the end of last week despite geopolitical concerns. US relations with North Korea deteriorated over the week with North Korea threatening to fire missiles near to a US island territory in the Pacific.
Key dates for the week
GBP – Consumer Price Index
USD – Retail Sales
EUR – Gross Domestic Product
USD – FOMC minutes
EUR – Consumer Price Index