Weekly GBP/EUR Round-Up

This weeks currency update with Keith Spitalnick

‘Stress test’ and ‘double dip’ have been the key phrases of the last week.  Banks need to bring back confidence to the money markets and financial equities, and the way to do this is to synthesize strains on the bank capabilities.  Pundits have argued that these tests don’t put on enough pressure and some have questioned the value of a stress test that all the banks can pass; nonetheless these tests and the measures the ECB are bringing to the fore have strengthened the euro by a fraction.

Sterling closed down at 1.1937, with a trading spread of 70pts showing that cash and money market swaps have not attracted traders, but with the ECB ceasing its bond buying drive and Jean Claude Trichet commenting that it is “too early to declare an end to the financial crisis”, there could be further damaging data to come from across the Channel. The UK simply has to cross its fingers that it can weather its current economic storm.