Euro Falls Against the Sterling as German Trade Deficit Widens
LONDON, August 10, 2012 /PRNewswire/ –
The pound sterling strengthened against the euro on Wednesday, August 8, while the US
dollar snapped a three-day losing streak against the single currency as investors
abandoned the euro for safer haven currencies following a raft of troubling data out of
the eurozone this week and increased expectations of ECB stimulus.
The euro’s recent turn follows the release of negative German economic data midweek,
an announcement by Banque de France that the country could suffer a shallow recession, and
news that Spain’s industrial production dipped for a 10th straight month, by 6.3% in June
following a decline of a revised 6.5% in May.
As a spread betting investor [http://www.finspreads.com ], the recent swings in the
value of the euro against a basket of currencies, including sterling and US dollar, could
enable you to net a tidy profit.
Where next for the euro?
On Wednesday, August 8, France’s Central Bank stated that it expects the country to
fall into a recession in the third quarter, with output likely to contract further, with a
fall of 0.1% between July and September.
Data out of Germany, meanwhile, revealed that industrial production slid by 0.9% in
June; while Spanish industrial production figures slumped for the 10th consecutive month,
heralding new fears for the eurozone’s fourth-largest economy.
As a result, the euro snapped a three-day winning streak against the US dollar,
falling to $1.2356 late on Wednesday, while the euro also fell against the sterling to a
rate of GBP0.7895.
Take a spread betting position on the future direction of the euro
With spread betting [http://www.finspreads.com ], you can net a potential profit from
any price swings in the single currency against a basket of currencies in the coming days.
In order to net a profit, you simply need to determine whether you expect the euro to
stabilise and reverse course, or continue falling against another currency, for example
pound sterling or US dollar.
For example, if you expected the euro to slip lower against, say, the pound sterling
in the coming days, you would take a short position on EUR/GBP and you would net a profit
for any falls in the euro against the British pound below your sell price. If, on the
other hand, you expected the euro to strengthen, you would go long EUR/GBP and you would
profit from any rise in the value of the euro against the British pound past your buy
With spread betting, you would profit so long as prices move in the direction you had
anticipated (ie the euro rises and you had gone long EUR/GBP or the euro falls and you had
gone short EUR/GBP). If, however, you were wrong and prices moved in the opposite
direction, you would net a loss.
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