Pound falls against the Euro after record low CPI

Good morning,

With the only data to come out in the Eurozone today being the German Wholesale Price Index, there is very little indicating the strength of the Euro is going to increase, although the rate may increase if the UK data comes in as expected.

Tomorrow in Europe we have the Eurozone Industrial Production where there is a near 1.4% drop from previous figures. The gains the Euro could see today may be completely neutered tomorrow.

The news with the most significance in the UK today is the CPI (Consumer Price Index – December) which is expected to come in weaker than the previous month, around 0.7%

With the CPI moving further away from the target of 2.0% the Pound is likely to weaken off against the Euro and the US Dollar and possibly some of the other 19 major currencies. Already at a 12 year low of 1.0% can it really drop even further?

With very little to come out today in the US with much interest to economists, the Dollar looks as if it is going to be up against the Pound following on from the UK CPI figures set to come out this morning.

MORNING MARKET RATES:

GBPEUR 1.2789
GBPUSD 1.5120
EURUSD 1.1821
GBPSEK 12.096
GBPAED 5.5535
GBPAUD 1.8511
EURGBP 0.7818
GBPJPY 178.83
GBPTHB 49.665