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FXstreet.com (Barcelona) - Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that the impact on fx markets of the ongoing easing of the Eurozone sovereign crisis has become more evident in early 2013, with ´safe haven´ currencies GBP and CHF starting to correct.

He notes that EUR/GBP and EUR/CHF have risen to their highest levels since April 2012 and December 2011 respectively and the easing of safe haven inflows into the UK have left the pound more vulnerable to the downside to still weak economic fundamentals in the UK which have had limited negative impact upon the pound over the past couple of years.

He writes, "The UK economy appears to have contracted again in Q4 2012 with weak momentum heading into 2013 as evident by the service PMI survey falling to its lowest level since April 2009 in December. The unfavourable combination for the pound of weak growth and above target inflation remains in place with the annual rate of headline inflation likely to remain relatively stable at around 2.7% in December supported by price rises for energy and gas feeding through. Still with the pound already very weak the scope for further downside is limited which will likely to help cap EUR/GBP upside beyond 0.8500."

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