UK Retail Sales on the Rise as Eurozone Ministers Meet to Discuss Spain & Greece

Pound to Dollar Rate Supported by UK GDP Data

Eurozone finance ministers were meeting today, to discuss a bailout for Spains banks and the future of Greece’s two rescue packages. The resolution of these issues is, in my opinioin, key to the long-term stability of the EU and the single currency. The markets have been dogged by uncertainty over recent months, as the economic stranglehold tightened around Europe and investors ran for cover as first Greece, then Portugal, Ireland, Italy and Spain were plunged into debt and their economies contracted, as unemployment rose and growth forecasts were cut.

What investors now need to see is a real fiscal startegy put in place, that will assist with long-term economic growth in the region, whilst finding the right balance with the necessary austerity measures. If this resolution can be found, then I do believe we could see the start of a euro fight back against both GBP and the USD. What to me has become very aparent is that all those waiting for 1.3o on GBP/EUR, should be prepared to be dissapointed.

GBP/EUR rates have pushed back through 1.24 this afternoon and at time of writing were sitting at 1.2427, up over a quater of a cent since the start of this mornings trading. This spike could well have had something to do with the release of todays UK retail sales, which showed an unexpexted rise of 1.4% in May. This increase has led to optimism here on our own shores that the retail sector may finally be ready to show some consistent improvement, which will ultimately be a huge boost to our economy and to sterling.

GBP has fallen off against the USD this afternoon, as the positive sentiment surroundiong Greece and Europe is seemingly having a knock on effect. Investors may well of seen the news as a reason to be hopeful that the global economy is picking up and that will entice them to be slightly riskier with their assets and move money away from the ‘safe haven’ dollar and into riskier currencies, that may provide the opportunity for higher yields.

If you have an upcoming currency requirement or would like to be kept up to date with all the latest market movements and key economic data, then please feel free to contact me directly at [email protected] or on 01494 787 478.