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Small growth of GB Pound Overshadowed by the Euro Debt Crisis

The GBP is strengthening against the USD with daily highs averaging around 1.61. The UK Manufacturing Production report showed a 2.0% increase over last year’s figures although the Industrial Production statistics showed a 0.7% decrease.

The National Institute of Economic and Social Research released figures showing a 0.5% growth in estimated GDP for Great Britain. The tests are generally believed to be highly reliable and this growth bodes well for the GB Pound. In the USA, The Investor’s Business Daily (IBD) TechnoMetrica Institute of Policy and Politics (TIPP) released the US’s Economic Optimism Index at 40.6. This shows a pessimistic economic outlook, as people are planning to inject less capital into the domestic marketplace.

These factors, however, have limited bearing on the markets, as all eyes are on the Eurozone debt crisis. Silvio Berlusconi has narrowly won a vote to remain in power, although he has lost the majority, according to Reuters. Italy’s 10-year bonds have reached almost catastrophic highs of 6.67% and investors are very weary of the 7.0% mark that triggered bailout packages for Ireland, Greece and Portugal. Consequently both the GB Pound and US Dollar are being used as safe havens against the wavering Euro.

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