Pound still under pressure, rates down.

Good Morning. Sterling dropped against the US Dollar and Euro yesterday, but strategists said the moves were due to holiday-thinned volumes. It’s hard to be bullish on the UK economy and 2010 will be a difficult year for the UK. Any strength in sterling is just a product of it being undervalued. Rates @ 08:30am are as follows:

  • GBP/EUR 1.1078
  • GBP/USD 1.5883
  • GBP/AUD 1.7805
  • GBP/NZD 2.2150
  • GBP/CHF 1.6490
  • GBP/CAD 1.6646
  • GBP/JPY 146.36
  • GBP/ZAR 11.747
  • EUR/USD 1.4343

Good news for UK Retail Sales

Shoppers have been flocking to the High Street over the Christmas weekend, with numbers far exceeding those from this time last year, figures have shown. The number of shoppers out on Sunday, 27 December was 17.9% up on the same Sunday last year, said Experian, a research house that measures footfall. Experts said shoppers may be racing to beat the VAT increase in January.

It’s important to remember though the fact that this year, retailers did not start their sales before Christmas. Last year they slashed their prices in the week before Christmas, because they really needed to get rid of their stock. “hey’ve taken a far more measured approach to the Christmas period this year. In this regard, then, the bubble is somewhat artificial and should not be taken to mean that consumers feel the recession is behind them.

UK Unemployment
Unemployment will peak at 2.8 million in 2010, according to the latest forecast from the Chartered Institute of Personnel and Development. The business group said unemployment would continue to rise for the first six months of the new year, despite the recovery in the UK economy. The forecast is more optimistic than previous predictions, however does show that analysts don’t expect the recovery in the UK to happen until well into next year, which will hinder pound rates rising.

Bank must lend more
There should be more competition in the banking sector with more lending from non-UK banks made available to small firms, a group has said. In its new year message, the Federation of Small Businesses (FSB) called for banks to return to their “normal lending criteria”.

Despite the Quantitative Easing measures the Bank of England have been taking over the last year, banks have still not been lending, and this has also hindered recovery from recession. Until there are proper incentives for the banks to lend, this will remain unchanged.

Todays Data
not much really. From the US we have Crude Oil Stocks Change & the Purchasing Managers Index

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