Poor UK Service Sector Data Halts Sterling’s Momentum (Matthew Vassallo)

Euro Suffers Losses to a Strong US Dollar and a Resilient Pound Sterling

Following the positive response created by the release of the recent UK Gross Domestic Product figures, you could be forgiven for thinking the UK economy had finally turned a corner. Yes we have moved out of recession for the first time in 2012 but today we were given a stark reminder of how fragile our economy still is and confirmation, if it was needed, that we do indeed have a long road to recovery. Today’s UK Service Sector data was the ‘weakest in almost two years’ and has halted GBP’s recent momentum. Rates were pushed back under 1.25, a level that has not been broken for the rest of Monday’s trading.

This market movement came about despite further concerns over Greece, who are currently putting together a new austerity package aimed at cutting a further 13.5bn euro of spending or face bankruptcy and France, who’s leader Francois Hollande  has been urged to cut labour costs to reform its flagging economy.

With concerns surrounding the economic stability of the eurozone likely to continue and the UK economy requiring a consistent run of positive data to back up the recent upturn, I feel the markets could stay fairly flat over the coming days. We are still likely to see spikes in both directions, which could provide both euro buyers and sellers

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