New yesterday from Europe showed that the German economy grew by 3% in 2011 which was in line with forecasts. The German economy has been used to prop up some of the struggling smaller European economies such as Greece over the course of last year and so the fact their economy is still showing growth is good news for Europe.  The Euro has held relatively steady against the Pound over the last couple of days and positive news like this could help to turn the recent trend and push Sterling Euro exchange rates back down. Currently it appears that the market is struggling to break through the current levels of resistance at the 16 month high.

In the UK yesterday it was announced that the high speed rail link in the UK, HS2, was approved and will begin building work in 2015. While the government said that this will aid business up and down the country there are many that question how a country in such a challenging financial economic climate can afford to spend thr projected £32 billion on this project. It is clear that this will lead to job creation and more money in the economy but with the budget deficit so high in the UK this level of spend could put more financial pressure on the country. The reaction in the Home Counties where HS2 is going to heavily effect is not positive with many concerned it will not only damage the natural beauty of the local landscape but criple the local community with house prices plummeting and people and some businesses looking to move away from the area, only time will tell of the full effect on the UK and its economy.

With the interest rate decisions in both the UK and Europe due tomorrow stay in close contact with our currency brokers here at Foreign Currency Direct plc so they can keep you informed of any market movement and explain in detail all the different contract options available to you. Call us today on 0800 328 5884 or 0044 1494 725353 or email info@currencies.co.uk