Exchange Rates and Market Commentary [30/11/2011]

Exchange Rates and Market Commentary [30/11/2011]

Good morning and welcome to today’s foreign exchange daily market commentary on Wednesday the 30th of November.
Chancellor Osborne’s autumn speech yesterday was anything but comforting. He cut growth rate for the year to 0.9 per cent from 1.7 per cent in March. Growth rate for 2012 was slashed to 0.7 per cent from the earlier 2.5 per cent. That’s pretty bad news for the economy and don’t be surprised if Britain witnesses stagflation next year. That’s something Governor Mervyn King should be really worried about.

Despite George Osborne’s not so inspiring speech, the Sterling surprisingly managed to gain yesterday against the greenback and the euro. Ratings agency Fitch issued a warning saying that while the UK government seems committed to reduce budget deficits, adverse economic and financial shocks may make it difficult for the country to retain its AAA status. In short, the current EU crisis or another banking implosion may bring down the top rating.

Talking of the eurozone crisis, the brief stock market rally got over yesterday after Standard & Poor’s decided to downgrade major US and European banks. Fortunately for Athens, the Eurogroup approved the sixth tranche of €6 billion bailout money from its first rescue package. Dublin’s fourth tranche worth €11.5 billion was also confirmed yesterday. The EU finance ministers also agreed to enhance the lending capacity of the European Financial Stability Facility in Brussels. Chairman of Eurogroup Jean-Claude Juncker indicated that Eurozone may create a co-investment fund to attract foreign participation and may insure 30 per cent of the bonds issued by the peripheral economies.

GBP/EURO – 1.1701
GBP/US$ – 1.5522
GBP/CHF – 1.4351
GBP/CAN$ – 1.6088
GBP/AUS$ – 1.5609
GBP/ZAR – 13.0961
GBP/JPY – 121.21
GBP/HKD – 12.1039
GBP/NZD – 2.0470
GBP/SEK – 10.7749

If your currency pairing is not listed above, speak to a foreign exchange broker by clicking through to our comparison tables at

EURO: The common currency gained against the US dollar over speculations that the European Central Bank will lend money to IMF which in-turn will lend the money to Italy. The Eurozone employment data is due today morning and overall unemployment data is expected at 10.2 per cent. In the US, IFR predicts private payrolls to rise by 150,000 in November, which would be the biggest jump since April. The sterling remained firm against the euro yesterday and the GBP/EUR pair changed hands higher at 1.17.

USD: The greenback lost ground yesterday despite another positive report. The index of consumer index rose to 56 in November from a revised 40.9 in the last month. The dollar index – which measures the USD against a basket of six major currencies, dropped to 78.990 from 79.236 in the previous session.

Elsewhere, the Australian dollar jumped nearly 2 per cent against the USD, indicating an overall increase in risk appetite.

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Have a great day!


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