by Sam Hewitt
Sterling
has held its ground versus the euro today, standing close to 1.3485
throughout the day, just half a cent from its highest in 7 years, or
since December 21st 2008. This is in spite of the fact that the
Eurozone economy, and Germany’s especially, expanded more than
expected in the last three months of 2014.
The
pound has held firm versus the euro today, although the common
currency bloc grew +0.3% in Q4, says official statistics body
Eurostat, more than the +0.2% forecast. In particular, Germany’s
economic growth exceeded even the most optimistic forecasts, hitting
+0.7% between October and December. According to UniCredit Chief
Economist Andreas Rees, this may reflect “consumers spending more
because of lower energy costs, record-high employment and rising
wages.”
Sterling
hasn’t weakened versus the euro today however, in spite of this
upbeat economic news from the continent. This may reflect the
continuing uncertainty about Greece’s future in the eurozone,
overshadowing the Eurozone’s unexpected economic momentum. Right
now for instance, just two weeks remain before Greece must receive a
€7bn bailout tranche, without which it will go bankrupt, and will
almost certainly be forced out of the Eurozone. With this worry, it’s
hence no surprise that sterling retains the upper hand versus the
euro.
