GBP under pressure as the BCC reports

It seems as if it has been a while since we have heard market moving
information from the UK. Last night the British Chamber of Commerce revised
their GDP expectations for the UK from 0.6% to 0.1% YoY. The BCC expects the UK
economy to stagnate in 2012, however, a potential growth of 1.9% in 2013 is
expected.

Unemployment is expected to peak at 2.9m before slowly retreating. Sterling
came under pressure due to this release, falling slightly against the Euro but
more aggressively against the US dollar.

George Osborne plans to continue the austerity cuts but the IMF and the BCC
believe our government needs to do more to boost growth. Downside pressure
remains on GBP today as our manufacturing sector is expected to contract for
the first time this year.

Worries in Europe continue to mount as the Spanish banking sector is need
for €184Bn to balance their sheets. There has been no conclusive solution for
the government or the ECB to help bail out Spain’s four biggest banks. Adding
more fuel to the fire, the EMU’s rate of inflation dropped more than expected
from 2.6% to 2.4%, proving how tight consumer spending in the Eurozone is. The
risk of inflation is falling dramatically, which could encourage the ECB to
reduce their interest rates, causing further devaluation in the Euro.

The US posted another weekly rise in jobless claims and private sector
employment also came under expectations. Chicago Manufacturing data released a
drop in activity falling from 56.2 to 52.7. Concerns in the lack of ability in
the world’s largest economy increased risk aversion, causing safe haven
currencies to benefit across the board. With safe haven currencies benefiting
the Bank of

Japan stands ready to act if the Yen continues to strengthen.

It is a great time to sell USD or buy Euros.