It proved to be a quiet day of trading for GBP/EUR on Friday, despite equity markets in Europe enjoying a rally after Citigroup and General Electric both reported smaller losses than expected in the first quarter. Investors were averse to taking on too much risk ahead of the weekend, in addition to the fact that the pound had enjoyed a significant rally in a truncated week. Sterling gained over a cent against the euro in the week, driven by improved risk appetite in markets on the back of major US banks releasing first quarterly results ahead of forecast. The single currency was also put under selling pressure during the week as comments first by Axel Weber and then by Jean-Claude Trichet suggested that interest rates are set to fall in the eurozone next month with the potential for quantitative easing as well.
There are no major economic releases due in the eurozone or the UK today, so expect GBP/EUR to continue taking its direction from equity markets.
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