Mark Carney offers thoughts on a possible UK Eurozone exit

It was another quiet day for the UK yesterday with little data out to influence GBP strength – the only data of note waspositive net borrowing figures which came in lower than expected. This, however, had no impact on the pound.

What we did see yesterday evening was a speech by BoE Governor, Mark Carney, that included opinions on a potential exit from the Eurozone. What Mr Carney had to say was that the Bank stands against the UK’s possible exiting of the Eurozone as being a member does, in fact, offer many positives for Britain’s economy. He also added that for those states that are non-euro members, there needs to be safeguards to protect those members’ interests.

As with the start of the week, there isn’t much data out today – just retail sales numbers, which are expected to show a pick up. Retail sales are always a good general indicator of how the economy is performing, so should the numbers come in positively then there should be some strengthening seen for GBP.

The euro didn’t fare so well yesterday, with little data released and external markets having more sway over EUR’s fortunes. What we did see was talk from the European Commission on a new controversial scheme whereby Eurozone governments guarantee banking deposits of up to €100K –this is something that Germany is very opposed to, however, with the worry being that shared, associated banking risks mean more problems for all should the scheme implode.

Today from the Eurozone we’ll see plenty of economic data as well as a press conference from the ECB which may regard monetary policy.

Across the Atlantic, the dollar has seen some strength on the back of little data releases of importance –it still, however, seems to remain in the shadow of the euro. Today we’ll see employment numbers and home sales data, then next week all eyes will be on a meeting of the Federal Reserve.