Fresh worries about European Central Bank policy sent the euro sharply lower after one of the bank’s more hawkish members took comments about possible interest rate cuts a little further than usual. Rumours of a possible ratings downgrade for both Germany and France also made the news, although debt auction in Spain could help repair the single currency by emphasising that demand for eurozone debt still remains strong. Sterling was also damaged, falling to new one-month lows against the euro after an unexpected jump in UK unemployment overshadowed minutes from the latest Bank of England meeting. Global worries should remain the dominant subject in the coming sessions with the latest G20 meeting kicking off. Talk of currency manipulation will probably be a minimum outcome from the meeting and should keep traders in a more cautious mood and favouring the US dollar.
Sterling
Economic data is pointing sterling further south with markets expecting to see a drop in British retail sales heightening concerns about the UK economy following a disappointing rise in unemployment. The ILO jobless rate in the UK surprised investors by moving from 7.8 per cent to 7.9 per cent in the three months...
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