Sterling had a steady week. The Bank of England minutes were released last week which showed there had been a 7 to 2 vote in favour of keeping UK interest rates on hold. The UK economy is certainly slowing but that is no different from others. Property prices are softening. There will be reductions in UK interest rates next year but we will also see reductions in interest rates elsewhere. Sterling continues to be fairly friendless.
The Cypriot £, which is pegged to the €, sits at Cy.£0.808/£1 inter bank. Although Euro land has some significant economic positives when compared to the UK and US it won't have it all its own way. The German economy is slowing and the strong € has seen a lot of European industry begin to suffer and worry. Airbus viewed the current strength of the € against the US$ as company life threatening! The housing markets in Spain and Ireland are also in trouble. The European Central Bank is likely to keep interest rates on hold for a while to counter inflation but this is likely to have a significant negative affect on the Euro land economies. Has to be a good time to bring back funds to the UK.
No comments:
Post a Comment