Weekly € rates and comments - week commencing 21st July 2008

 

Sterling remained steady last week and has kept within a tight trading range against most currencies. In the last 3 months the price has found a new base and this stability is perhaps owing to forecasts that interest rates are to remain on hold in the UK until the end of the year. UK unemployment figures released last week showed an increase and mean that sterling is unlikely to see much upside in the short to medium term.

 

In spite of mixed European data and despite reports that the region may enter an "economic growth trough", the € has maintained a strong position against all major currencies. It now sits at €1.2550/£1 inter bank. European exports dropped by 3.4% in May [perhaps due to the overpriced €] and it remains to be seen if the Eurozone will continue to be immune to what is supposedly a global economic crisis.