11th October 2010
Good morning. Today as usual on a Monday, we’ll have a detailed look at how Sterling has performed against the Euro and US Dollar over the last week, in addition to the weeks data that we think will affect exchange rates.

With Sterling hovering close to a 5 month low against the Euro on Friday we again had a fairly volatile week. Highs reached 1.1589 whilst Friday’s lows plummeted to 1.1354.

Last Monday’s publication of bullish, above estimate PMI Construction data caused a small jump in the value of sterling although this was short lived. The release of the EMU’s GDP data on Wednesday was positive for the Eurozone and reignited the Euros continued strengthening against the Pound.

The two major information releases for the week were the BoE and ECB interest rate decisions on Thursday. With both institutions choosing to remain dovish and not change rate levels of 0.5% and 1% respectively, this information actually had little effect on the GBP/EUR pairing.
Many analysts believe that the pounds weakness versus the Euro could be down to possible Quantitative Easing by the Bank of England.

Looking to the week ahead there are few major publications. Nationwide’s consumer confidence data is released on Tuesday and analysts predict that a bullish figure could aid the Pound. A low level of consumer confidence however could show an economic turn down and have a negative impact on the GBP.

The threat of a double-dip recession was voiced by Chancellor of the Exchequer