The pressure on the single currency is accumulating on the increased market worries about Greece bankruptcy and the solid germane position from giving unwarranted financial support to Greece until now. The worries about spreading the debts problems in other countries in the euro area and downgrading their creditability are putting pressure on the single currency across the broad as the deficit to GDP ratio average is at 6% nearly right now, while it should be below 3% on Maastricht treaty of the Euro area with no joint certain rescue plan or European mechanism until for bailing these financial problems out to store confidence on the Euro zone financial stability outlook.

Last week, Moody's warned about the triple A crediting countries with the current slow economic recovery in Europe comparing with US and the debt which is still accumulating in other European countries like Spain and Portugal because of the credit crisis which pushed the governmental spending up and expanded the monetary conditions for spurring investment and growth which is still struggling in Europe suffering from the cost of these easing stimulating plans in their budget threating the market confidence and the recovery itself with market focusing on the consequences of the debt building in Europe and the ECB inability to take to take any tightening action keeping the interest rate at 1% for more than a year after the realized financial stability in US and its positive impact on the global equities markets which support the greenback which is looking having a brighter interest rate outlook differential right now comparing with the single currency which had new financial problems and very lower rates of growth losing the investors trust in holding it.

After the Britains have got unexpected jobs rising in February adding 32.3k jobs in a pace has not been seen since November 1997 while the market was waiting for losing .5k after a massive losing in January by 23.5k, the cable could reach 1.538 giving the bargain hunter a higher place for selling it after rising more than  2 figures and half in less than an hour from 1.522 before the data triggering stop loses orders to 1.538 but it was not enough to change the market sentiment towards the British economy and pound holding giving back all of this gains and closing last week just above 1.5 versus the greenback trading below it right now while it has become politically unstable by UK preliminary elections as the conservatives' opposition party has lost its strong leading versus the labor ruling party on the recent polls results with the exacerbating UK debt after post its first net borrowing deficit month since the beginning of 1993 with the public sector borrowing in Jan reaching 4.3 B Stg while the market was waiting for covering 2.8 B Stg of the debt which can push budget deficit ratio to GDP above 12% like Greece otherwise it looks in building up in UK which is facing a higher inflation outlook as the BOE has mentioned recently in its last meeting minutes release last week after their decision to keep the BOE buying bonds plan unchanged at 200b Stg unchanged unanimously which can erode the impact of the QE policy which can be kept further as the UK is still struggling with Q4 GDP 2009 revising up to just .3% from .1% in the first reading after being the only western European economy in recession in the Q3 at -.1% quarterly.

Best wishes

FX Consultant

Walid Salah El Din
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