Sterling
Sterling performed relatively well against the majority of currencies on Friday, helping to erase some of the losses seen earlier in the week. Growing speculation that the Bank of England is likely to increase quantitative easing to help boost the economy had seen sterling fall against the euro and US dollar throughout the week. On Wednesday we will have the minutes of the last meeting of the Monetary Policy Committee released and we will see if the markets speculation has some substance. This week sees little data released from the United Kingdom apart from on Wednesday when we have public finances data released. Expectations are for a significant reduction in the government's borrowing requirement from the previous month. Please call in to get a detailed update from your trader.
Euro
The euro struggled on Friday as concerns about Greece and Spain were at the forefront of traders’ minds once more. In theory the Greek question should be resolved this week with the Eurozone finance ministers meeting on Tuesday expected to come to a decision as to how they will finance the recent debt extension, as well as renegotiating long term targets. Last week's announcement that Europe has slipped back into recession is likely to continue to affect the general trend. Expect to see prices react to manufacturing data from France and Germany, the core of Europe with forecasts being for a small decrease on last month. Get in touch now to lock in a price.
US dollar
The US dollar was one of the best performing currencies on Friday due to its safe haven status as markets remain cautious due to the looming fiscal cliff and the on-going problems in Europe. Data released showed that industrial production had fallen by 0.4% when slight growth had been expected. This week’s main releases includes existing home sales, building permits, unemployment benefits and the Chairman of the Federal Bank is also speaking. Until we have some resolution regarding the so-called fiscal cliff, the situation in Greece and a potential Spanish bailout, one would expect the US dollar to remain relatively strong; but, there are no certainties in such a volatile market. Call in now to speak to a trader.
Worldwide
Elsewhere, the South African rand was the best performing currency on Friday strengthening against all of it major counter parts. The Swiss franc struggled following comments from the Chairman of the Swiss National Bank stating that the overvalued franc was damaging the economy. Overnight we saw inflation data from New Zealand come out much lower than expected and later this week we will see the release of the Monetary Policy Meeting minutes from Australia and the Governor of the Reserve Bank of Australia is also speaking. Japan’s central bank meets on Tuesday morning, there will be retail sales figures and inflation data from Canada and Chinese manufacturing PMI will also be announced. Call in now to reserve a rate of exchange.
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