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Recently the Sterling has not performed particularly well against the Dollar, but it has been perceived as safe haven against the Euro, and obviously it has been performing very well pretty much since the end of the last year. It has come out in an importunate time for the Bank of England. Basically, interest rates in the UK have been at a very low level and similar to the level where the government has been deleveraging its accounts. However, the way it has been able to do that is with the weaker currency. Since currently the Sterling is turning about, the deleveraging path is going to be much more difficult for the government, thus this is going to put more and more pressure on the policy makers to offer a bit more growth-oriented strategy. It is not really helping at the moment.
What is your GBP/EUR forecast for the Q3?
It is more difficult to forecast The GBP/EUR, because a lot of technicals are involved in this particular currency pair. However, I certainly believe that the target would be around 77-78 versus the bottom of the range we saw in 2008.