Good morning and welcome to today\u2019s foreign exchange daily market commentary on Wednesday the 30th of November.
\nChancellor Osborne\u2019s 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\u2019s pretty bad news for the economy and don\u2019t be surprised if Britain witnesses stagflation next year. That\u2019s something Governor Mervyn King should be really worried about. <\/p>\n
Despite George Osborne\u2019s 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.<\/p>\n
Talking of the eurozone crisis, the brief stock market rally got over yesterday after Standard & Poor\u2019s decided to downgrade major US and European banks. Fortunately for Athens, the Eurogroup approved the sixth tranche of \u20ac6 billion bailout money from its first rescue package. Dublin\u2019s fourth tranche worth \u20ac11.5 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.<\/p>\n
GBP\/EURO \u2013 1.1701
\nGBP\/US$ \u2013 1.5522
\nGBP\/CHF \u2013 1.4351
\nGBP\/CAN$ – 1.6088
\nGBP\/AUS$ \u2013 1.5609
\nGBP\/ZAR \u2013 13.0961
\nGBP\/JPY \u2013 121.21
\nGBP\/HKD \u2013 12.1039
\nGBP\/NZD \u2013 2.0470
\nGBP\/SEK \u2013 10.7749<\/p>\n