ECB speaker Makuch has spoken today and stated that ‘the ECB is still in a mode of strong vigilance’. Makuch goes on to say that the situation in Portugal is serious with an ongoing concern of contagion amongst other European nations. The ECB’s speaker was quick however to point out that the April rate hike is very likely although of course not a certainty.
The Euro has failed to make much ground against the majors today. It would appear that the market is still undecided as to where it should trade next. Goldman Sachs announced earlier this year that the GBP/EUR pair could reach 1.10 and that now doesn’t look beyond the realms of possibility if the ECB go ahead with their expected rate hike in April.
The pound has benefited from slightly better than expected (-0.5%) from (-0.6%) UK Q4 Final GDP figures. Mortgage approvals were also up to 47,000 from the expected 46,000.Thes figures have helped halt the Sterling free fall for the time being.
The US Dollar has gained from better than expected pending home sales data yesterday, traders are now speculating that the Fed’s interest rate policy could shift towards the hawkish side as the US economy gathers momentum.
The oulook for the pound still looks uncertain, the decline in the last week could continue however with todays slightly better than expected figures this could be the start of a recovery.
