UK Slides as Negotiations Continue at EU Summit

The UK pound has began this morning falling against the major currencies, as talks at the EU Summit in Brussels are resuming, where UK Prime Minister David Cameron is still seeking to agree a reform deal.

The pound is currently buying $1.43, after peaking at $1.434 before 6AM GMT.

Against the euro, the pound is performing slightly better, and is buying EUR1.29, a hike from purchasing below the EUR 1.29 level in the early hours of this morning.

Prior to the EU gathering, the pound rose as investors rallied to short cover their stockpile of sterling, in what has been a bearish market for the pound, since the end of last year.

And the fortunes of sterling over the next few days, are likely to be tied to the outcome of how successful any EU deal is perceived to be for the UK.

The latest polls compiled on the ‘Brexit’ have indicated that staying in the EU would be the most favoured outcome of the proposed referendum.

A poll conducted by ICM revealed that 43% would prefer to remain in the EU, with 39% who said they would rather leave.

Ipsos MORI’s figures, in their latest telephone poll, found that 54% wanted to remain in the EU, and to leave 36% , which was virtually unchanged from their last poll.

Employment Increase Across the EU

Eurostat figures have shown that 18% of the unemployed found new positions in the third quarter of last year, compared to the second.

For those who were unemployed in the second quarter of last year, 62,7% or 12,9 million remained looking for work.

While 17.9% or 3.7 million moved into employment, and 19.4% a total of 4 million moved towards economic inactivity in the third quarter.

European Free Trade Agreement member Iceland were the best performing country in the survey, with 58.3% gaining employment, they were followed by Denmark, where 33.9% of their unemployment found a new position.

Greece was the worst performer in reducing the numbers on their welfare rolls, as a relatively low 5.9% became economically active in the labour market.

The UK, who celebrated the best employment figures since 1971 this week, placed 22.1% of their unemployed back into work.

France, despite a sluggish economy, removed 20.4% from their unemployment levels and into work.

Producer Prices Fall in Germany

In January, Germany’s index producer prices fell by 2.4% according to official figures, compared to figures for the same month in 2015.

This was slightly lower than the figure recorded for December last year, where the index declined by 2.3%.

Energy prices were reduced by the largest amount of 7.3% in January, in comparison to a year ago, pulling the index down.

The cost of intermediate goods fell by 2.2% last month year on year, and was the second most influential category in reducing the value of the index.

In contrast, the prices of non-durable consumer goods rose by 0.6%, prices of capital goods by 0.6% and prices of durable consumer goods by 1.4%, all year on year figures.