Smart Currency Rates and Comments 7th November 2012 - Congratulations to President Obama

It was another difficult day for sterling yesterday as it continued to lose ground against the majority of its trading peers, and failing to rebound against the US dollar as anticipation around the election results continued to build. Yesterday also saw the release of Manufacturing Production data, which came in at 0.1% growth, less than the forecast 0.3%. This disappointment continues to suggest that the UK economy is failing to recover as well as previously thought following last month's GDP figures and may cause the Bank of England to start another round of quantitative easing come Thursdays meeting. There is very little data out of the UK; but, as much of the world wakes up to the US Presidential election result, we can already see a dollar negative reaction in the market as risk appetite increased following President Obama being re-elected to the White House for the next four years. Call in now for the latest news and a live quote.

The euro had a better day yesterday making early gains across the board on the back of better than expected PMI data from the Service Sector – notably from Spain and Italy who are subject to continued bailout speculation. Gains continued against other major peers in spite of surprisingly poor German manufacturing data. While historically US elections have had limited effect on the markets we have seen the euro jump by one per cent against the dollar following the results. We may see the Greek parliament vote on austerity measures cause even greater volatility and a failure to pass the vote could be of grave consequence for the euro, and for Greece itself. Get in touch now to lock in a price.

The US dollar struggled through much of yesterday as investors sold off the dollar in the run up to the Presidential election results. Overnight it has become clear that President Obama has retained his position of President of the United States after securing the 270 Electoral College votes needed to win the race. Furthermore, the Democrats party have retained the majority in the Senate and the Republicans have retained the majority in the House of Representatives. The US dollar has weakened off against all of its trading peers following the result as risk appetite increases globally and due to the increased likelihood that the ultra-loose monetary policy will remain for some time to come. There is very little actual data out today other than crude oil inventories and the benchmark 10-year bond auction. The later will be watched closely by investors as they weigh up the need to hold onto long dated government bonds following this morning’s election result. Call in now to speak to your trader and to get a live price.

Elsewhere, the South African rand was particularly strong yesterday whilst the Canadian dollar also fared well following PMI data being released. Late last night the financial stability report from New Zealand was released and first thing this morning we will see the release of inflation data and the level of foreign currency reserves held by the Swiss National Bank. Later on this evening we have unemployment data from New Zealand and current account figures from Japan. Call in now to lock in a price.