Daily Currency Note 23rd October 2012 - Is sterling heading for 1.20 against the euro?

Sterling dropped to a six month low of 1.2245 against the euro yesterday with increasing confidence in the Eurozone following the regional Spanish elections. Against the US dollar sterling strengthened in the morning only to weaken off in the afternoon. Data showing the number of new UK mortgage approvals in the last month will be released first thing this morning. The main focus though will be on the speech given by the Governor of the Bank of England this evening as investors look for indication of future monetary policy decisions from the Bank of England. So please call in for a price and to discuss the markets with your trader.

The euro performed strongly across the board yesterday as a better than expected result for the incumbent Prime Minister in Spanish local elections added some certainty to Spain's presence in the Eurozone, and investors reacted accordingly. Sentiment was boosted further as the French President announced that he and the German Chancellor consider Ireland to be a special case and are seeking a deal on its bank debt, compounding the effect of this weekend's announcement on a single bank supervisor. There is very little data out in Europe today except business climate figures from Belgium. Expect the markets to remain jittery in the lead up to Wednesday’s busy agenda which includes the ECB President’s speech and manufacturing and services Purchasing Managers' Index (PMI) figures. Call in now for the latest news and changes in the euro rate.  

The US dollar has a mixed day yesterday, remaining fairly range bound against sterling and the euro as risk appetite increased. There is very little out in the way of data in the US today; but, as always the US dollar will fluctuate due to its safe haven status as risk sentiment changes in the global market. Please call in now for the latest news and a live update.

Elsewhere, the big mover yesterday was the Japanese yen, losing ground against all of its major trading partners. The Japanese currency slid on the back of the weakest exports since 2011, with the economic minister suggesting that more Central Bank stimulus may be required to boost the economy. The Canadian Dollar continued to struggle, and much focus will be on today's policy meeting, where the Bank of Canada are expected to place less emphasis on a potential rise in interest rates. Other data released from Canada this week includes retail sales figures, whilst the Bank of Canada will release its report on monetary policy as well as giving a press conference. There was better news for the South African rand yesterday, gaining versus all of its major peers, as foreign investors resumed the purchase of the country's bonds. Call in now for the latest news and a live quote.

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