Weekly Financial Update
- Created on Monday, 14 May 2012 08:00
Another week of volatility awaits us from the markets. Greece is trying desperately to form a government and even then it is not sure any administration can adhere to the tasks set by the IMF under its austerity levels.
This will not inspire any natural confidence in the Euro, and we could see it fall further, perhaps against the USD and also Sterling. Sterling could even hit the magical 1.25. We have to admit it wasn't our favoured option and we still think the Pound will get caught up in the Euro turmoil as UK businesses are affected with trade in Europe. However, the Pound is becoming a safe haven currency - again something we do not agree with but something the Pound will gain from.
There is still a worry about UK economic figures. Data in April showed that the UK economy is pretty anemic and growth is not predicted to be much better as the year goes on. Along with the fiscal deficit the UK is certainly not out of the woods and this could eventually prove negative for the pound. However, lets enjoy it while we can and see what the week brings.
Key factors:
* Anticipated range this week STG/EUR 1.2100-1.2500
* EURO uncertainty remains
* USD may continue to strengthen
* Will sterling benefit from safe haven status
Have a good week,
The Premier FX Team
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