Good Morning. The pound fell over a cent yesterday against the Dollar but picked up against the Euro to hit highs we haven’t seen since January after it was announced that the Greek budget deficit was worse than thought. Rates @ 08:45am are as follows:
- GBP/EUR 1.1588
- GBP/USD 1.5374
- GBP/AUD 1.6702
- GBP/NZD 2.1624
- GBP/CAD 1.5345
- GBP/ZAR 11.475
- GBP/JPY 143.48
- GBP/CHF 1.6596
- EUR/USD 1.3265
Greece’s budget deficit worse than first thought
Greece’s budget deficit was much larger than expected last year and the figures may get worse still, according to the EU’s statistics office. The new data shows a gap of 13.6% of gross domestic product (GDP), not the 12.7% first reported. The credit rating agency Moody’s also cut its rating on Greek debt and warned that there could be more downgrades. Moody’s cut its rating on Greek sovereign debt to A3 from A2, saying that there was “a significant risk that debt may only stabilise at a higher and more costly level than previously estimated”.
The Second Live Election Debate
We saw the second live election debate last night which seems to have helped David Cameron slightly more than the other 2 leaders. Seeing the polls this morning, the Tories have risen to 37% with the Lib Dems at 36%, and Labour trailing at 28% (according to YouGov). This lead for the Tories is clearly not enough for an overall majority so we would expect to see Sterling weaken over more fears of a hung parliament but with the news out of Greece yesterday, and fears that other European nations (Portugal, Ireland, Italy & Spain) could go the same way, we might see the current rise in the Pound be sustained.
UK GDP figures released at 09:30am
The first estimate about the growth of the UK economy in the first three months of 2010 are due to be announced at 09:30am. The GDP figures, will be the latest insight into the health of the economy. We already know that the UK economy grew by 0.4% in the 4th quarter of 2009 when it finally emerged from the deepest recession on record. We have heard this morning that most city experts are predicting similar growth in the latest period, but that there was room for surprises; so keep your eyes on the markets!
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