Pound Drops Versus Euro As EU Discuss Greece Financing

The pound dropped against the euro and the dollar during the overnight trade as investors run into safety of the so called “safe have” currencies after Federal Reserve cut its forecast for US growth and as EU Leaders agree on additional aid for Greece. Sterling dropped below 1.60 against the greenback for the second day in a row as Federal Reserve Chairman Ben Bernanke said that US central bank lowered its growth outlook for 2011 and 2012. Separately, EU officials pledged to stabilize the euro area economy, vowing to hold off a Greek default as long as Prime Minister George Papandreu pushes through a package of budget cuts next week. There are no major economic releases scheduled in Britain today. The only notable event in UK is the Governor Mervyn King’s press conference on Financial Stability Report. Major release today comes from Germany, where IFO business survey is expected to consolidate to 113.4 in June from 114.2 in the previous month. On the other side of the Atlantic US Durable Goods Orders for May headline the economic calendar, with projections for the figures to improve by 1.5%.