Pound Continues its Bullish Trend
Posted on 07. Apr, 2009 by admin in Daily Euro Analysis, Euro Currency, Euro Currency News
The Euro-Zone economy continues to show signs of weakness and yesterday was no exception. European retail sales fell more than twice the forecasted value as the economic situation continues to worsen. This was the largest yearly drop since the record has been tracked. Further erosion was seen in an investor confidence survey; though this result was slightly better than expected. The data highlights a European economy that has not shown signs of improvement.
This scenario has been apparent in the trading of the EUR/GBP. The Pound has jumped 4% on the EUR in the past 18 days. The trend has extended its gains as better than expected economic data has been seen from Britain the past week. Perhaps the Bank of England was successful in lowering their benchmark rate to 0%, well ahead of the European Central Bank’s strategy which has entailed a measured pace to reduce European Interest Rates.
Today’s trading of the EUR crosses may be influenced by the release of monthly manufacturing production data from Britain. Manufacturing makes up almost 80% of the industrial production in Britain. Therefore this release is treated as a leading indicator. If the reading comes in better than the 1.4% contraction forecasted for the previous month, look for the EUR/GBP to continue its decline to the 0.9050 mark.
