Good morning. The euro strengthened against the greenback today after a top official said policymakers are contemplating to recapitalise the region\u2019s banks in a coordinated fashion. The market is expecting intervention by EU leaders to ring-fence the region\u2019s banks from Greek debt crisis.<\/p>\n
More bad news continued to flow from the eurozone with the region\u2019s services PMI revised lower to 48.8 in September from the earlier 49.1, the lowest since mid 2009. Spain and Italy also slipped along with Germany. Only Ireland and France showed expansion in services PMI, though sustainability remains a big question.<\/p>\n
The UK services sector however, sprung a surprise with a clear expansion in services PMI activity. The reading was 2.3 notches higher than the expected reading of 50.6. On the flipside however, economic growth was revised downwards. Across the Atlantic, the US added 91K jobs and non-manufacturing data came as expected. This should come as a boost for the market and a double dip-recession may not be imminent. Bank of England\u2019s meeting today may not result another round of QE and the MPC may decide to wait for the Q3 GDP and inflation numbers before deciding of further government asset purchase.<\/p>\n
The ECB may also choose to put another rate hike on hold, and may support the region\u2019s banks by opening more credit lines. The region\u2019s inflation was recorded at 3% year-on-year basis last Friday and a rate cut may not come immediately.<\/p>\n
GBP\/EURO \u2013 1.1552
\nGBP\/US$ \u2013 1.5417
\nGBP\/CHF \u2013 1.4251
\nGBP\/CAN$ – 1.6047
\nGBP\/AUS$ \u2013 1.5930
\nGBP\/ZAR \u2013 12.2889
\nGBP\/JPY \u2013 118.34
\nGBP\/HKD \u2013 12.0055
\nGBP\/NZD \u2013 2.0104
\nGBP\/SEK \u2013 10.5745<\/p>\n