Financial news in Europe was dominated last week by the announcement of interest rate cuts from the European Central Bank and the Bank of England. BoE rates now sit at 2.0%, a 100 basis point cut, whilst a 75 basis point cut down to 2.5% was announced by the E.C.B, the biggest since the single currency was formed.

The economic calendar bore grim news for the Euro, with depressing figures showing increased unemployment and a 0.5% decrease in food purchasing, furthering evidence that Europeans are tightening their belts in preparation for recessionary times. The economic calendar also confirmed that the region entered into a recession with a 0.2% contraction in Q3. You would think that an economy could not be much worse than the Eurozone but this is not the case. The U.K had equally, if not more damning figures with the service PMI reading, falling to its lowest level since records began. The reading included employment, new orders, outstanding business and business expectations all hitting new series lows.

For the upcoming week the U.K needs positive data to make any significant gain on the Euro and not visit the all time lows of last week. BRC retail sales are out this week which will provide a reading on growth ahead gauging consumer spending trends. Positives are needed from the RICS house price figures in order to pull out of its current nose dive and boost a real recovery for the economy. The ECB report may also provide some Euro weakness allowing the Pound to possibly gain some much needed ground. With dour figures being released from all quarters it may be prudent for buyers and sellers alike to consider Forward Contracts to avoid any large losses.