Pound Sterling Forecast

As many readers will be aware the Greek election took place yesterday evening and the votes have now been counted. It would seem that the party shouting for a stop to austerity, which are the risk for most, have missed their chance. There is still no outstanding winner so a coalition will need to be made in the coming week but it has definitely elevated the short term concern of the euro failing.  Initially this helped the euro gain sharply first thing but the markets seem to have now turned their backs and the gains seen have been lost. Markets seem to still be hugely concerned about the euro but the focus has changed to the other side of Europe, i.e. Spain. 

On the bond markets costs still are climbing across Europe ansd this morning costs pushed up for Spain, Italy and surprisingly Germany. Spain is still over 7%, Italy over 6% and Germany over 1.5%.  (Check out this blog for more information as to why this is so important.) It shows to me that the markets are still worried and that more needs to be done by the ECB to introduce some confidence.  This is a story that will continue to run so if you need funds in the next few weeks make sure you are a regular reader.

 In other news, we have the following data releases. (To find out why this changes the market feel free to re-read the following blog.)

 Tuesday

• G20 meeting – Staring tomorrow – Grade 3 – Could change things dramatically
• 9:30 UK Consumer figures – Grade 2 – Expected to fall – Sterling weakens expected

 Wednesday

• 9:30 UK Bank of England Minutes – Grade 2 – Concern as could surprise the market with a wild reaction
• 9:30 UK unemployment – Grade 2 – Expected to climb – Sterling weakness expected

Thursday

• 9:00 European Purchase Management figures – Grade 2 –  Expected to fall – Euro weakens expected
• 9:30 UK Retails Sales – Grade 3 – Forecasts not announced yet – come back on Wednesday or call 01494 787 478 for more info

 With all this in mind I personally would expect GBPEUR to continue to be very volatile, especially with the G20 taking place this week.

If you have been waiting for the elusive 1.25 to return I would imagine you are walking on a tight rope. To get up to date information on your situation from a currency expect feel free to contact us using the form on the page, calling directly on 01494 787478 or emailing me at hse@currencies.co.uk