Sterling set for another difficult week

As HMV and Jessops called in the administrators last week they capped off another uneventful and disappointing weekly session for Sterling.Sterling set for another difficult weekFriday’s retail sales did nothing to quell the continuing bad news from the U.K. with the figure coming in at a -0.1% rather than minimal growth.

This sent Sterling into another downward spiral with the US Initial Jobless Claims continuing to fall.

The GBP/EUR  has been testing 1.19 with the Euro continuing to strengthen against the Dollar but falling short of 1.34 and GBP/USD finished last week below 1.59 after a tough week for Sterling .

As David Cameron looks set to announce a referendum about the U.K.’s involvement in the E.U. Sterling will have another difficult week ahead.

With Wednesday’s unemployment count look set to increase to buck recent trends, especially in the aftermath of a difficult trading during festive season.

Friday’s preliminary GDP data is expected to show that the U.K. contracted again after the last Quarter’s shock growth, bringing the possibility of a triple dip recession, and a credit downgrade from the coveted AAA rating currently held, back to the fore.

On the other side of the pond, after better than expected data last week, in the US and China, the US Dollar will look to continue march forward against Sterling and Yen with Tuesday’s release of existing home sales, expected to show another increase to 5.10m sales last month.

On Friday the New Home Sales is expected to show more growth as the nation’s housing market looks set to continue improving into 2013.

In euroland, the euro will look to see if it can continue its steady rise back to stability this week after battering Sterling to the low 1.19’s last week and testing the 1.34 level against the US Dollar.

On Tuesday we have German ZEW Economic Sentiment and ECB president Mario Draghi speaking with Thursday French and German PMI data and finishing a busy economic week on Friday with German IFO Business Climate.

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