GBP v EUR hits a fresh 6-month low

Another huge test for Sterling this week with daily risk events ahead..

The Pound was unchanged against the Euro last week and got through very tough conditions with a flurry of important economic releases from the major countries. This week the pair has started on the back-foot and it's really a toss of a coin as to what happens the remainder of the week. 

The key driver comes from the UK Government with its Autumn Statement, which by-all-accounts will include upcoming tax cuts for all. Support could arrive for the Pound if the Chancellor approves this and decides to boost business investment, despite the limited fiscal headroom available. 

On Thursday, we will witness a straight head-to-head with the EU & UK delivering this month's PMI data. Both economies are performing badly at the moment, but currency volatility will ensue if anyone misses estimates. The US offers the same on Friday to ensure volatility remains heightened right to the end of the week. 

Sterling slipping below 1.14 mid-market against the Euro this morning is a slight worry, as this is a strong technical support level. Cable on the other hand, is seeing support at current levels that may continue through the remainder of the month, but still all forecasts are showing lower levels are just around the corner.


EUR
It was a great week for Euro v US Dollar last time out, which climbed over 2% after the Dollar was widely sold-off once again this month. Most traders and investors agree that anything over 1.08 mid-market is overdone, which is our opinion exactly. But that might not be enough to stop 1.10 being claimed in the weeks ahead before an expected correction. 

There is plenty of key data being released out of the Euro-Zone this week to keep the € honest. 'Super Thursday' will see the main action as-well-as Friday's German GDP number being watched closely by all. A 50-50 call for what happens this week for all those involved in the Euro. 



USD
The Dollar was under pressure again last week and unlike the beginning of the month, we may not see a quick turnaround in fortunes this time. For us and many we follow, the USD has been oversold for the second time this month. However, with another week's worth of important economic data being released, we may see further USD weakness before the usual state of play returns. So a 'favourable' time once again for $ buyers.