Eurozone: Decision time for Spain
- 16 April 2012
We open this week with the realisation that the recent lull in the crisis in the Euro is now over. Last week saw rising government bond yields in Italy and particularly Spain which has continued this morning. However let us look first at another signal which is the Euro exchange rate and whilst we will briefly note that the Euro has touched 1.30 this morning versus the US dollar this is not the one I mean. In some ways it is the exchange rate versus the UK pound sterling which is signalling something of a change as it pushes forwards to 1.2170. Yes the poor old battered pound has been making some progress after a weak period where the Euro had bullied it! Indeed it has been making something of a surge today. Yet if you look at the UK with a coalition government looking rather hapless and frankly often incompetent and a weak economy we do not see the foundations of a strong currency unless the competing alternative outlook is worse.
Actually £ has been making a recovery since the Euro crisis began as the dog days of 2007/08 and its fall to 1.05 have been replaced by rises of 7.8% in 2009,3.3% in 2010 and 4.4% in 2011. So are Florence and the Machine right to sing?
"The dog days are over
- Falling UK real wages cannot be covered up with housing market subsidies forever
- The UK economy gets quite a boost from the official statisticians
- How long can France afford its economy to continue stagnating for?
- How has the recent strength of the UK Pound affected the UK economy?
- Three stock picks from F&C European Small Cap manager Sam Cosh
- Government to abolish 55% death tax on pensions
- Just one year to go before Britons can get up to £1,300 a year in State Pension top-ups
- Osborne's move to abolish 55% tax on inherited pensions: Expert reactions and commentary
- UK property market eases back as new borrowing rules start to bite
- Mindful Money's weekly shares watch: Sainsbury’s, Wolseley & Compass