Smart Currency Daily Rates & Comments – 23 November 2010

Smart Currency Daily Rates & Comments – 23 November 2010

Sterling gained against the euro yesterday after the single currency lost early gains following the bailout as the country was plunged into political uncertainty. Despite the headline grabbing news, the financial markets were anticipating a bailout last week. Therefore, yesterday’s news did not see the volatility that might be expected with sterling creeping back over €1.17/£1 to hit a high of €1.1750/£1 so far this morning. Many analysts expect sterling to gain against the euro in the coming months as surprisingly strong UK data combined with the lower likelihood of further Quantitative Easing leaves the UK economy in a relatively resilient position. Out today there is mortgage approval data and later on Adam Posen (the sole advocate of further Quantitative Easing) speaks in Stockholm. Call in now for a live exchange rate.

In the Euro zone, political uncertainty dogged Ireland yesterday as the country faces a nervous few weeks. Public anger at how the government has handled the banking crisis was directed at the Irish Prime Minister Brian Cowen yesterday, as he stated he would stay in office until parliament passed the budget before calling an election. With a multi-billion euro bailout riding on a budget that is acceptable to the EU and IMF, the chances of passing the budget dropped dramatically as 2 independent members of parliament withheld their support for the plans. Data out today includes purchasing data, but this is likely to have a minimal impact relative to the Irish situation so call in and speak to one of the team to ensure you are protected.

In the USA, the market moving news so far today has been the reports coming through of artillery fire between North and South Korea. The prospect of war in the region has seen investors flock to the safe haven of US dollars and US Treasury bonds. Stock markets have also fallen globally as the combined effect of Ireland and the Korean exchange of fire has left investors with jitters. Out today there is the ‘Preliminary’ GDP figure for the 3rd Quarter – the first amendment of the latest figure. Any amendments up or down will have a large effect. Call in now for a live price.

Elsewhere, the Australian dollar took a large hit overnight. As a ‘risk correlated’ currency – i.e. it is sold off on any hint of global uncertainty – the combined brunt of Irish political uncertainty and a potential conflict in Korea saw investors flock to safe haven assets such as the US dollar. Call in now to make sure you don’t lose out.

EURO/GBP – 1.1710
US$/GBP – 1.5925
CHF/GBP – 1.5746
CAN$/GBP – 1.6225
AUS$/GBP – 1.6218
ZAR/GBP – 11.18
JPY/GBP – 133.10
HKD/GBP – 12.358
NZD/GBP – 2.071
US$/EURO – 1.3590

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