Fears of double dip recession in UK persist

The Euro remained under pressure yesterday after Eurozone manufacturing purchasing manager's data (PMI) for August came in slightly below expectations and emphasised a slight loss of momentum since the start of August.

The actual manufacturing number came out down 1.7 point at 55.0, the lowest reading since February, and whilst the services PMI was also down by 0.2 points at 55.6.

A volatile day for currency exchange brokers - Sterling had performed quite well during the day, pushing towards recent highs against the Euro and US Dollar until comments from a member of the Bank of England monetary policy committee (MPC) sent Sterling crashing.

The newest MPC member, Martin Weale, commented about the likelihood of a double dip recession in the UK and described himself as "comfortable" with current interest rates. He also thinks that the Bank of England's growth forecasts for 2010 and 2011 are rather "too optimistic".

These comments saw Sterling fall 2 cents against the US Dollar to £/$ 1.54 and fall from £/€ 1.2279 to £/€ 1.2175 against the Euro.

The focus today will be on US with existing home sales for July, which are expected to slump for a third consecutive month, and the Richmond Federal Reserve manufacturing PMI for August