Tuesday April 5, 2005 - 08:16:13 GMT
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CMC Markets - www.cmcmarkets.com
UK Industrial production figures likely to be key in sustaining GBP rally against EUR.
April 5th - The prospect of slowing economic growth in the eurozone is putting the common currency under a degree of pressure across the board. There’s no shortage of data due for release from the eurozone this week, including PMI and retail trade numbers today, then the ECB rate verdict on Thursday but expectations are that none of this will offer much support.
Almost without doubt, interest rates will be left unchanged, whilst rising unemployment is likely to keep domestic demand soft, so as a result the euro looks set to remain exposed on the downside. Against Sterling, the common currency has now made a sustainable move through the lows of early February and is edging towards 0.6800. Technically a small reversion may be due but this may only arise if we see some downbeat news out of the UK. Industrial production for February is due for release on Thursday and after last month’s disappointing result, there’s a degree of concern as to whether the sector is on the verge of recession. Expectations are that we’ll see an upturn, but it’s precisely this sort of data that may result in the EUR staging a rally against GBP…
PAUL JACKSON and ENIS MEHMET
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