Hello from Premier FX E News Monday 30th August 2010
he main talking point of last week was the US Economy. Data from the United States showed that the economy was not growing as fast as first thought and there was a fair chance that the USA would drop back into a very damaging recession. This would have a damaging affect on the UK Economy and could even bring the country back into recession. The UK would suffer as the USA, being the world’s major economy would not be able to produce as much as it did and could not afford to pay for any exported goods, therefore stumping the growth of UK manufacturing. It is however likely that the US Government will do as much as it can in the form of stimulus to make sure the economy stays on track.
The Pound is still holding up well. We have again seen it touch 1.22 and we could see it move a little higher as Sterling could benefit from any USD weakness and be more popular for investors in comparison to the EURO. We cannot get too confident about Sterling. As we have always said there are still many negative fundamentals that could see the currency move lower. Short term it will not go above 1.25, in fact it would be a surprise to see it reach that level at all. These are still good levels to buy currency and the only thing this week that will increase the value of Sterling significantly will be good economic figures from the manufacturing sector. We will have to wait and see!!
* Anticipated range this week STG/EUR 1.2000 to 1.2400.
* UK house prices fall most for 16 months.
* Manufacturing figures due Wednesday.
* Ireland credit rating cut.
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The Premier FX Team
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