The UK's trade deficit was less than expected in January, due to strong exports of cars to the US, China and Russia. Exports are growing more quickly than imports, and it is reassuring that the economy is gradually rebalancing with figures posting positive growth in the first quarter of the year.
Europe's markets rallied after the German ZEW survey for March showed that the economic expectations index is rising the highest since June 2010, with growth for 2011 at an all-time high of 3%.
The European Union has decided to suspend €495m of funds due next year to Hungary, because of the country's budget deficit however they will allow three months for Hungary to pass more budget cuts.
Spain is looking to install a plan over the next two years that would cut nearly 6% of GDP off its deficit. The program would be particularly challenging given Spain's contracting economy and 23% unemployment rate, Europe's highest
In talks yesterday, EU finance ministers also attempted to reach common ground on a proposed financial transaction tax that has met resistance from the U.K. and Sweden. A minimum of all 17 Eurozone members needs to adopt a tax on financial transactions for it to be effective.
U.S. stocks rose in response to encouraging news about domestic retail sales and small-business optimism, putting key benchmarks above milestones, which has resulted in gains for the dollar against the euro yesterday. We are expecting to see more volatility today across GBP/EUR and EUR/USD, with the below fundamentals all key.
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