Smart Currency Rates and Comments 3rd December 2012 - The euro continues to strengthen

Sterling

The euro is in the ascendancy having gained five cents against sterling and seven cents against the US dollar since July. On Friday, sterling struggled across the board, hitting a 5 week low against the euro as optimism over the debt crisis in Greece drove the euro upwards. Furthermore, renewed confidence over a resolution surrounding the so-called fiscal cliff in the US caused global confidence to increase. This week is likely to see greater volatility in pricing, as influential Purchasing Managers' Index (PMI) data comes out from the Manufacturing, Construction and Services sectors on consecutive days. Furthermore, Thursday's interest rate announcement and decision on quantitative easing by the Bank of England could cause greater price action; however, both are widely expected to be kept on hold with most economists predicting another round of monetary easing in the New Year. Please call in to get a detailed update from your trader.

Euro

The euro had a strong day on Friday, gaining ground against all its major trading peers as optimism surrounding the latest tranche of the Greek bailout increased. The 17-nation currency touched a 1-month high versus the US dollar, as news that German ministers had approved the latest agreement in Greece's ongoing rescue package. Friday did see the release of slower than expected inflation data, however speculation that US politicians are hopeful of avoiding the so-called fiscal cliff led to a surge in risk appetite. This week sees a host of data released from Europe with the majority of focus on Spain. Unemployment figures and a Spanish 10-year bond auction on Tuesday will provide an insight into investor’s outlook on the Spanish economy and confidence surrounding its future growth. The European Central Bank (ECB) interest rate decision will also be released however, the President of ECB's comments on Friday may prove more influential on the euro following the deal on Greek-aid last week. Call in now to see if it has continued to improve, and to get a live rate.

US dollar

The US dollar had a mixed day on Friday as renewed confidence that the so-called fiscal-cliff situation could be sorted by its January deadline was marred by a raft of weak data being released. Inflation data, personal spending and personal income figures all came out below market expectations. This week we will see a lot of data released including manufacturing and non- manufacturing PMI data alongside US consumer sentiment figures which will identify the level of financial confidence amongst consumers. There is also a raft of employment related data released this week, culminating with the highly influential Non-farm employment data released on Friday. Get in touch now to take advantage of the most up to date price.

Worldwide

Elsewhere, the South African rand was the worst performer on Friday, dropping against all of its trading partners following the release of data showing that its trade gap was 10 times bigger than this time last year. The Japanese yen was also extremely weak on Friday following the news that the Japanese cabinet had approved an additional JPY 132 billion worth of quantitative easing, dropping to a 7 month low against the euro. GDP data out of Canada showed that the economy had stagnated when slight growth of 0.1% had been anticipated. There is a lot of data out of Australia this week including the Reserve Bank of Australia’s interest rate decision, retail sales figures, GDP data, unemployment data and trade balance figures. It is also a busy week for Canada with the Bank of Canada's interest rate decision, building permits figures and unemployment data. Call in now to speak to a trader.