Smart Currency Rates and Comments 26th November 2012 - Will the euro stay in the ascendancy?

Sterling

Sterling had a mixed day on Friday. It strengthened against the US dollar but weakened against the euro and commodity backed currencies as risk appetite drove the market. At one stage sterling even pushed down to 1.233 against the euro and with the possibility of further weakness we could see a push towards the 1.225 level. Revised quarterly GDP data released this week will be the most significant announcement and is expected to match the preliminary reading at 1% growth. On Thursday various lending data is released with the household borrowing figures for October expected to show that the credit supply continues to loosen. With not much else released from the UK this week, sterling’s relative strength will take its lead from news produced elsewhere, with US data and the Eurogroup meetings likely to cause the most volatility. Please call in to get a detailed update from your trader.

Euro

The euro performed well on Friday after better than expected business climate data from Germany showed that economic health had increased for the first time in seven months. The lack of negative data coming from the Eurogroup meetings also kept the euro strong. We should finally see a resolution of the Greek debt question that rumbled on through last week, which in theory will be good news for the economic future of the union and could cause the euro to strengthen further still as confidence increases in Europe. The other main release this week will be the Italian benchmark 10-year bond auction; but, the main focus of the global market will be firmly on today's Eurogroup meetings. Get in touch now while the euro remains strong.

US dollar

The US dollar lost ground against most of the other majors on Friday as risk appetite increased due to the renewed confidence in Eur ope off the back of positive progress with Greece and better than expected data released from Germany. Late Friday we saw the US dollar increase to over 1.60 against sterling. This week we have some significant data coming out of the US, in particular on Thursday with the release of GDP data for the third quarter. Other data includes durable goods orders which are a leading indicator of production, consumer confidence and other housing data. Call in now to reserve a rate of exchange.

Worldwide

Elsewhere, Canadian inflation data released on Friday was slightly better than expected posting a figure of 0.3%. The Russian rouble strengthened as demand was high to pay for taxes in Russia and the South African rand also performed well. This week, the main releases include Canadian GDP, Chinese manufacturing PMI and business confidence data from New Zealand. Call in now to speak to a trader.