The pound was quiet during the overnight trade after RICS survey showed the UK housing market remained under pressure in December. Although the headline figure came out better than expected, printing –16 from –17 in November (consensus: -19), the reading is still extremely low by historical standards as the property market face challenges from deteriorating economy. Sterling came under pressure after the British Chamber of Commerce said that more Bank of England stimulus may not be enough to revive UK economic growth. Also released during the overnight trade was the BRC (British Retail Consortium) release, reporting that UK retail sales grew strongly in December. The headline figure showed that total sales in value terms increased by 4.1% up from 0.7% in November. With empty economic calendar scheduled for the remainder of the day, expect the pound to remain in current ranges before BoE officials meet later in the week.
The euro dropped against most of its major rivals before several countries within the single region auction debt sales this week. Also, Greek PM Lucas Papademos is seeking to form an outline for a 100 billion debt restructuring plan next week, ahead of the talks with EU and IMF about the terms of second round of financial support. On the economic docket, French Manufacturing and Industrial Production figures came out today, beating the expectations but still legging from November reading. The manufacturing gauge came out at 2.2% in December, from 2.6% in the previous month, beating the analyst expectations of a -0.1% contraction.
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