Sterling recovered from a 7 week low against the US dollar on Monday as risk appetite improved across global markets. Rumours that European leaders were pushing towards more radical action on the euro zone crisis sparked by reports that the IMF was preparing an aid package for Italy saw a surge in demand for risk related assets. However, poor data from the UK put investor expectations of a recovery off course. Retail sales figures came in very low, showing a fall at the highest rate for 2 ½ years as consumers cut back spending. In addition, a report by the OECD stated that the UK will slip back into recession next year and that the Bank of England should increase the level of Quantitative Easing to £400bn. Today sees the chancellor’s Autumn report so call in now to avoid losing out.

In the euro zone, the euro recovered from 7 week lows against the US dollar as there was fresh hope of progress in the euro zone crisis as rumours circulated that the IMF was preparing an emergency aid package for Italy. In addition, with a European Summit next week and a European Finance Ministers meeting later today, many hoped to see progress towards more decisive action. The crisis continues to dominate currency movements, so ensure you protect yourself by calling and speaking to one of the team today.

In the USA, risk appetite was helped by reports of strong retail sales on “Black Friday” – the traditional post-Thanksgiving day of retail discounting similar to Boxing Day in the UK. In addition, there were reports that yesterday – dubbed “Cyber Monday” – would see record levels of online shopping ahead of Christmas, which helped investors feel marginally better and saw the US dollar slip off.

Elsewhere, the Australian dollar jumped by more than 2% against the euro, hitting a one week high and the New Zealand dollar gained by 2% as investors felt better that a solution to the Europe crisis was on the way. Call in now for a live exchange rate.

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