The pound has been in retreat since yesterday, after trade data for January suggested that a weaker pound is not yet helping British exports. But this could be short-lived. Goldman Sachs economist Erik Nielsen thinks that the UK economy should emerge from recession before the Eurozone. Nielsen made the comments during an interview in Australia.
Hedgies prefer the US dollar
A currency survey of hedge fund managers conducted by TrimTabs Investment Research along with Barclay Hedge have found that the US dollar remains the favoured currency for hedge funds, with the Brazilian real coming in at second place. Hedge funds are still bearish the euro, and the currency remains one of the least-favoured, with hedge fund managers continuing to be concerned about the risk of a sovereign debt crisis in southern Europe, especially in Portugal or Greece.
Fitch downbeat on Greece
More bad news for the euro. Fitch Ratings, the credit rating agency, expressed doubt about Greece’s fiscal consolidation plan on Tuesday. It said that although in the short-term Greece’s fiscal position looks tenable, the outlook for the next six to nine months was less clear.