The pound declined against most of its major rivals during the early morning session after Moody’s Investors Service said it may lower the credit ratings of 14 British banks and building societies. Royal Bank of Scotland and Santander UK Plc are the institutions put on review for a downgrade, while Barclays Plc had its outlook on its senior debt changed to negative from stabile. Looking ahead to today, public finance data headline the economic calendar as April is the first month of the new fiscal year. A report is forecasted to show Britain’s budget deficit narrowed in April. Also scheduled for today is the CBI Distributive Trades release, with the expectations for the figure to drop to 11 in May from 21 in April. Expect for the pound to remain under pressure should the data fail to surprise on the upside.
The euro gained across the board this morning after German business confidence remained strong in May. The Ifo institute in Munich said its business climate index held at 114.2 from April, beating the expectations of a decline to 113.7. Also scheduled for today is the final reading of German first quarter GDP and Eurozone Industrial orders release. Expect for the euro to remain volatile as looming debt crisis is damaging the appeal for the single region currency.
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