Sterling
Sterling gained ground this morning against the euro following the inability overnight of the Eurogroup to agree on Greece's debt reduction programme. Truly remarkable how politicians can prevaricate while business confidence seeps away. Today’s Monetary Policy Committee meeting minutes will be the main release and whilst most economists are forecasting that there was a 9-0 vote against increasing quantitative easing, any variation away from this prediction is likely to cause volatility in the market. Other data released today includes the public sector net borrowing figures which are currently expected to show 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
Following the surprise outcome of the Eurogroup meeting where no agreement was reached on Greek debt, the euro has lost ground against both sterling and the US dollar. Yesterday the main news was that France's debt had been downgraded by Moody’s, to match Standard and Poor’s investment rating, underlining the fragility of the French economy and the state of the Eurozone in general. However the euro did reach a 2 week high against the US dollar on the belief that the Eurogroup meetings would find a solution to the Greek aid gap and would grant Greece the next tranche of its bailout. How wrong the market was. The main release today will be the German benchmark 10 year bond auction and it will be interesting to see how much demand there is for this safe haven asset. Call now to book a price.
US dollar
The US dollar has a mixed day yesterday as the markets kept a close eye on Europe and following the release of data showing that the number of building permits issued in the US has increased in October, keeping the housing starts at its highest level since July 2008. This positive data helped spark an increase in global confidence and as a result risk aversion dropped off. Today, we have the weekly jobless claims data being released a day early due to Thursday’s Thanksgiving bank holiday in the US. Other data released includes the manufacturing Purchasing Managers' Index (PMI) and consumer sentiment figures. Call in now to speak to a trader.
Worldwide
Elsewhere, the Swedish krona was the worst performing currency yesterday as it was forecast that the central bank would cut interests rates by 0.25% next month and then by a further 0.25% in February 2013. The Australian dollar also struggled yesterday as traders start to speculate that the Reserve Bank of Australia could look to cut interest rate in the short term. The Japanese yen was slightly softer as traders start to speculate that the Bank of Japan’s may look to boost the economy by injecting more money into it. This is despite the central bank voting to keep quantitative easing on hold for the time being. There is not much data expected to be released throughout the day; but, call in now to reserve a rate of exchange.
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