Sterling stayed firm against the US dollar and strengthened above €1.17/£1 against the euro despite a particularly downbeat statement by the Chancellor in his autumn statement to parliament. Growth forecasts for 2012 were downgraded to 0.7% from an estimated 2.5% in March and the Office of Budget Responsibility expects the economy to contract by 0.1% in the 4th Quarter of this year. Poor data in past weeks has also cemented the gloomy outlook for the economy with retail sales dropping by the highest level for 2 ½ years in October as consumers cut back on spending with inflation holding at more than 5%. Sterling recovered as most of the bad news was factored into the exchange rates. Call in now for a live exchange rate.

In the euro zone, the euro rose for a second day against the US dollar as there was speculation that the European Central Bank may lend money to the IMF in order to help Italy cope with the debt crisis. Italy’s borrowing costs have sky rocketed as investors have deserted the country in the wake of the recent crisis and left it having to pay more and more to borrow. Market sentiment yesterday seemed to suggest that European policymakers are taking action on the crisis, which helped support the euro.

In the USA, a rebound in consumer confidence in November also gave investor risk appetite a boost and saw the US dollar weaken off from recent highs. Out later today there is pending home sales and building approvals figures – both key pieces of data in the assessment of the US recovery’s prospects. Call in now to ensure you take advantage of any rate movements.

Elsewhere, the boost in risk appetite saw the commodity backed currencies strengthen against the US dollar and sterling. The Australian dollar surged by 2% against the US dollar before pulling back later in the day.

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