Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Strong UK Growth May Trigger EURGBP Slide

Published 07/28/2014, 06:28 AM
Updated 03/19/2019, 04:00 AM

Background:


The International Monetary Fund (IMF) says in its latest assessment of the global economy that the United Kingdom (UK) is growing at a faster pace than every other major developed country. The IMF upgraded its forecast for UK growth to 3.2 percent this year and 2.7 percent in 2015.
With just 9 months and 9 days to go until the next UK general election this news will be seen as underscoring the success of the coalition’s macroeconomic strategy.
The IMF's upgrade marks an increase in the economic assessment of the UK by 0.4 percent in 2014 and 0.2 percent in 2015 since the previous forecast in April. It was also the largest upgrade of any major western economy for both years.
The chancellor of the exchequer, George Osborne commented…
“…The IMF has upgraded their 2014 forecast for the UK by more than any other major economy. The government’s long-term economic plan is working. But the job is not yet done and so we will go on making the assessment of what needs to be done to secure a brighter economic future. …”
In contrast, the IMF said the Eurozone area will grow by a paltry 1.1 percent this year and just 1.5 percent next. Most of this will come from Germany whilst France and Italy will not contribute much at all and both have suffered strong downgrades since April. Percent Growth The debate in the UK is angled toward when the Bank of England (BOE) will raise rates. In contrast in the Eurozone the discussion is for how long rates will have to stay low and when and by how much a programme of quantitative easing (QE) will be deployed. Therefore there is scope for sterling to book further gains against the euro. EUR/GBP Management and risk: The chart above illustrates that since March 24 the path of EURGBP started to form a new, steeper corrective channel at 0.8386. Parameters: Entry: At the last traded level 0.7911 Targets: 0.7770…0.7533…0.7386 Stop: 0.8154 Time horizon: Medium-term.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.