The euro is once again on the back foot due to sovereign debt concerns but this time it is Portugal that is under scrutiny and with reports flying around about the ECB and other countries urging Portugal to apply for financial assistance the euro has fallen from its highs earlier in the week. The dollar has been the main benefactor of the euro’s weakness and sterling has seen a limited gain to back above the 1.18 mark. The UK is seen to have more exposure to the Eurozone debt problems, especially Ireland, which has dragged sterling down versus the USD pushing below 1.57 in early trade.
On a more positive note the UK CBI trade figures came in quite strong, according to the survey the volume of retail sales rose more than expected in November boosted by seasonal factors such as Halloween and the start of the Christmas period plus the impending VAT hike will start to have an effect. November saw the fifth month of retailers reporting higher sales.
Data for today is very light with just the Eurozone money supply figures and the German preliminary inflation figures out which means much of the markets driving force will be the worries and rumours over the Portugal debt problem putting downward pressure on the Euro and to a lesser extent, sterling.
Next week sees a busy time on the data front with a reasonable amount of data every day culminating with the US non-farm payrolls on Friday.