The pound is mixed this morning, consolidating against the dollar, but gaining against the broadly weaker euro after Moody’s Investors Service said France’s top credit rating is under pressure. The British currency weakened against the dollar on concern that UK economic growth will falter on euro region’s debt crisis. Looking ahead to today, consumer price data for September headlines the economic calendar. Market census is calling for CPI inflation to have reached 4.9%, versus 4.5% in August, and RPI inflation of 5.4% against 5.2% in the previous reading. Market participants are expecting considerable increase in inflation due to the impact of utility price increases. Separately, Bank of England Governor Mervyn King delivers speech to the Institute of Directors today at 20:00. Expect for the pound to remain driven by economic data and events on the continent.
The euro dropped across the board during the overnight trade after Moody’s Investors Service warned France regarding its credit rating. The agency said that France’s financial strength has weakened because of the global financial and economic crisis, making the nation’s debt rating the weakest among its Aaa peers. Single currency came under pressure yesterday after German Chancellor Angela Merkel said that “dreams” of an imminent resolution to the debt crisis aren’t likely to be fulfilled at next summit of European leaders. Looking ahead to today, ZEW Survey of Economic sentiment headlines the economic calendar in Eurozone with the expectations for the figures to deteriorate further. Expect for the euro to remain under pressure ahead of this weekend’s EU leaders summit.
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