Crucial data released at 9.30am this morning by the National Office for Statistics has revealed that the UK economy grew only half as much as predicted by economists.

Pound Sterling – UK Markets

The pound has begun to slip against the dollar immediately following the data release at 9.30 am this morning suggesting a volatile day ahead. The economy has not grown as much as anticipated and GDP has risen at 0.2 percent in the first quarter. Following the Pound’s particularly strong day against the Euro, the disappointing first quarter growth has cast light on Sterling’s fragile state just two weeks before the election and following round two of the televised election debate. Last night, the three main party leaders clashed over foreign policy and international affairs. The discussion on issues including immigration, Europe and Trident has again indicated voter support was spread between the three parties. The Conservatives are using speculation that a hung parliament will injure UK economic recovery and Sterling as part of their campaign to discourage votes for the Liberal Democrats. Taken overall however, the various post-debate polls indicate an almost dead heat once again. New figures confirm that the Government’s total borrowing for the financial year was £163.4 billion, the largest of any UK Government in peacetime, and unemployment is at a sixteen year high. The third round of the electoral debate on the economy next week will no doubt interrogate the wealth of statistics released this week.

US Dollar – US Markets

Sterling set to drop following poor economic growth figures It is a comparably quiet day for the US Dollar as the Pound and Euro overwhelm currency news. The US Dollar is likely to benefit as weakness sets in to the other two currencies. Data set to be released in the US today will cover March’s durable goods orders and new home sales, both expected to show gains.

Euro – European Markets

The Euro is experiencing an intense down-trend forcing it sit weakly against the US Dollar and the Pound as worries resurface that Greece may default on its debts. Leading economists have suggested that a default could have a momentous effect on the single currency. New data given from Greece to Eurostat has indicated that its budget deficit is much larger than expected and the EU’s statistics office have suggested the figures may get even worse and need to be revised again. Greece is preparing to ask the euro-region governments for a bridge loan of $11.3 billion. Greece’s finance minister, George Papaconstantinou is attending the Washington G-20 today. This has overshadowed news from other EU countries such as Germany’s positive export figures.

Other Currencies – Highlights

Today the G-20 finance ministers and central bankers will meet in Washington. Other than Greece, one of the main topics expected to be covered is China’s currency policy. This has kept the Yuan pegged to the dollar since July 2008 in order to help China’s exporters which the US has suggested provides an unfair subsidy to exporters. The G-7 met ahead of the G-20 meeting last night where it has been suggested the discussion was dominated by Greece and the need for international support. A press conference following the G-20 is scheduled for 5pm today.