The Irish bailout has dominated the currency market over the last few weeks causing euro weakness and dollar strength as investors flood to the safe have greenback.
One release that could change this trend is the Confederation of British Industry, Distributive Trades Survey. This is due out at 11am this morning and is an indicator of short-term trends in the UK retail and wholesale distribution sector. At this time of year it is very important because in the lead up to Christmas retail sales are vital to the economy here in the UK. If we see a high reading, you would expected to see the pound strengthen as this is good news for the UK economy and subsequently for sterling. This could result in GBPEUR pushing up toward the 1.19 mark. Obviously the other side of this is that a poor figure could see sterling weakness, good news for anyone who has foreign currency to sell.
The markets will be keeping a close eye on this release as it can often have an impact on the formulation of economic policy at the Bank of England and within Government. With QE (quantitative easing) still a possibility for the Bank of England and the VAT rise on the horizon for the Government, any unexpected release could cause problems for either party.
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