Concerns over the growth prospects of the UK economy caused sterling to flounder against many of its peers last week, with the most notable move against the euro, where we saw prices reach a nine month low.
Industrial and Manufacturing figures released last week added to the string of bad data that has been released from the UK over the last month, fuelling further negative sentiment on the pound.
Mario Draghi’s hawkish comments last Thursday has been crediting for declining yields on respective governments bonds in the euro zone as well as easing market turmoil. The next focus for European leaders will be the issue of reducing unemployment in Europe, which is currently at a record of 11.8%.
The US dollar saw some weakness during Asian trade following comments by Federal Reserve Bank of Chicago President Charles Evans, that the central bank should keep policy accommodative to support the economy and he expects interest rates to stay low until 2015.
US dollar buyers are presented with an excellent opportunity to take advantage of current rates, considering the negative sentiment on the pound, as the safe haven US dollar continues to be sold off in the wake of increased risk appetite amongst investors.
Key Announcements Today:
10.00am – EUR – Industrial Production: Expected to improve to -3.2% (YoY).
21.00pm – US – Fed’s Bernanke Speech.