Tuesday September 27, 2005 - 08:34:30 GMT
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CMC Markets - www.cmcmarkets.com
Pound under pressure as economy slows; Euro struggling to find upside.
September 27th - Slowing growth forecasts for the UK continue to take their toll on cable with the GBP USD rate continuing to retreat well below the 1.80 level. There’s going to be some concern mounting as to how the yield curve for Sterling is looking going forward and other than inflationary pressures – which continue to centre around the price of oil – there’s not too much that seems to be pushing the UK economy forward right now. With a rather quiet start to the week on the UK economic calendar, traders have been left looking elsewhere for direction although tomorrow’s Q2 trade deficit and CBI trades data may well stand to provide further direction as we move towards the weekend. Critically many will be checking to see that the country’s trade deficit continues to contract, although as a net exporter of oil there are certain clear factors in play that should be supporting the reduction here. Against the common currency, the Pound is now trading in increasingly tight ranges close to the 0.68 level although ongoing political uncertainty in Germany may be capping further gains here.
Today’s IFO data or Thursday’s German unemployment numbers could be sufficient to lend some support to the Euro, but in the shorter term the dollar continues to look the more dominant currency…
Paul Jackson and Enis Mehmet
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