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Good week for the GB pound

This weeks look at the state of money from currency expert Keith Spitalnick. A very good week for sterling last week as it pushed beyond the key 1.13 level against the euro and also gained against the USD. The push on sterling was largely attributed to improved economic data leaning to a more positive outlook for the UK economy. In addition the National Institute of Economic and Social Research (NIESR) estimated that UK fourth quarter GDP which is due out next week will come in at +0.3%- so therefore the UK will be out of recession! The upbeat assessment was mirrored by MPC member Andrew Sentence who commented that the Bank of England may need to raise interest rates this year.

Will GB pound continue to grow?

So will this good run continue this week? Hopefully so. We have a plethora of economic data and feedback this week from the UK economy which could galvanize sterling further. We start on Tuesday with the Consumer and Retail price index which is a gauge on inflation for the UK- the expectation is that the measures will show an increase in inflationary pressure which will add further to the probability of a rate rise in 2010. Following this we have the Bank of England minutes which may offer an insight into the cessation of the Quantitative Easing programme- possibly as early as February. Following this we have retail sales and jobless data followed by public finance data. So a big week for the pound and if we get more positives than negatives we could see a stronger pound ahead of the official release of Q4 2009 GDP next week.

Euro still fighting

For the Eurozone we are again focused upon Greece. Greek officials are summoned to Brussels to face a grilling over “unreliable data” which hid the real story behind the health of the Greek economy. This again could lead to a weaker euro, last week German Chancellor Merkel stated that the Greek problem is adding great pressure to the Eurozone. The key market level will be to hold above 1.13 and then push back to 1.15 to show a clear break from the current trading range of 1.10-1.13.

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