Sterling
Sterling, though losing ground against a buoyant dollar, performed well against the euro following the news that the UK public sector net borrowing rose at a slower rate than anticipated in the last quarter. The National Statistics Office reported that borrowing rose to 10.5 billion pounds rather than the expected 13.8 billion pounds. The UK currency is performing steadily against its euro counterpart as core macro-economic data, such as last week's robust Retail Sales and the improving housing market, support sterling. This has cooled speculation that Mark Carney will preside over more quantitative easing or interest rate cuts when he takes over the helm at the Bank of England next month though residual concerns do remain that his historically accommodative attitude to monetary policy could manifest itself should UK data worsen. Indeed, the disappointing Confederation of British Industry survey last week is a reminder that the recovery in this country is not completely assured and eyes will be on Wednesday's inflation report hearing as well as the current account figures and final GDP reading on Thursday as we move towards the end of the month. Be in touch throughout for the latest developments.
The euro felt the effects of a resurgent US dollar strength on Friday as the rate dropped by over a cent during the day. Whilst data concerning the difference between the value of imports and exports came out favourably for the euro, this did little, if anything, to prevent a significant slide. With regards to influential releases this week, this morning we have business climate data from Germany and later on this week we will have more data from Germany including the change in unemployment and retail sales figures. As always, traders will pay special attention to data emanating from Germany due to its position as Europe's biggest economy. The main other event this week will be the EU Economic Summit where the focus will be on economic policy and the completion of the EU's economic and monetary union. Call in throughout the week for the latest rates and developments in euro value.
The US dollar strengthened further on Friday pushing down to the 1.31 mark against the euro. Markets had surged following the announcement of a plan to bring stimulus to an end. It is another busy week for data in the US with Core Durable Goods Orders, Consumer Confidence and New Home Sales all due for release on Tuesday. Other key releases will be the final GDP reading which is expected to show the economy grew at a rate of 2.4% and on Thursday there will be the weekly release of unemployment claims alongside data showing the number or homes pending sale. Several members of the Federal Open Market Committee will also be speaking this week and it will be interesting to see what they say following last weeks comments from the Chairman of the Federal Reserve where he stated that he expected to start reducing the quantitative easing programme later this year and hopefully end it by the middle of next year. Stay in touch throughout the week with Smart.
Elsewhere, the Norwegian krone slid downwards for a fifth day against the US dollar, marking a week of decline not seen for over 20 years. For the first time since 2010, the Norwegian krone weakened past the 8 per euro mark following the Norwegian central bank's predictions that benchmark interest rates could be lowered this year. Sweden's krona meanwhile slipped the furthest in 2 months and the Canadian dollar dropped to near 2-year lows after the country's May inflation rates grew slower than expected and retail sales figures disappointed. It is a busy week on the data front with Trade Balance and Business Confidence figures from New Zealand; a slew of Japanese data including inflation statistics, industrial production and retail sales data, whilst we have all important GDP data from Canada which is expected to show there has been no growth what so ever. Be in touch with your trader throughout the week for information and prices from your currency pair.
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