Germany came to the rescue by reporting a growth of 0.5%, which helped the Eurozone massively as figures reported 0% growth in the first three months of the year. Will this mean a temporary much needed boost for the Euro? We very much doubt it with the huge debts being faced by Spain and Greece.
The Euro has suffered hugely versus the GBP & USD in recent weeks and based on current ongoing woes with Greece in question over leaving the Euro and Spain’s massive unemployment figures. The Eurozone may need more than ‘avoiding recession for the first three months in 2012’ to increase any real consumer or investor confidence in the troubled economy.
Focus from the Eurozone may be shifted for a short while to the UK today, as the Bank of England Quarterly Inflation Report is due out this morning. Analysts are already predicting that the Monetary Policy Committee is expecting to remain at the current policy setting. Also, strong exports to US, China and Russia meant that Britain’s trade deficit shrank by £2.7Billion in March. This will most likely keep the GBP at its current strong position versus the Euro and USD.
Because of the ongoing problems with Greece, we have seen the US Dollar gain further ground and we have dropped back into 1.26’s against the Euro.
We also have the minutes from the BoE meeting including a speech from Mervyn King. This is likely to lead to a Sterling sell off and perhaps more risk aversion towards the US Dollar.
For a live rate login to RationalFX now, or call +44 (0)20 7220 8181