Good morning and welcome to today\u2019s foreign exchange market commentary on Wednesday the 7th of December.<\/p>\n
German Chancellor Angela Merkel\u2019s proposal to enact tough new laws for closer fiscal union may not see the day of the light. A leaked report, prepared by European Council President Herman Van Rompuy, suggests \u2018a new fiscal compact\u2019 that does not require national referendums or ratifications by the parliaments. The report, a stark contrast to France and Germany\u2019s attempt to push stricter fiscal rules, notes instead of pushing a new treaty, amendment of one key treaty in the existing framework, called protocol 12, will do the trick. Such a move will be considerably quicker than the Sarkozy-Merkel plan and would not require extensive changes in treaties though national consensus may be sought.<\/p>\n
The report outlines four major steps to help solve the present crisis the region is witnessing. EU memner states need to ensure national debt remains under 60 per cent of GDP and domestic budget deficit doesn\u2019t breach the 3 per cent limit. The European Financial Stability Facility \u2013 the region\u2019s bailout fund, should be able to borrow from the European Central Bank directly and countries tapping the bailout fund will have to adhere to austerity plans imposed by the European Council. It also says countries facing higher budget deficits need to guarantee they will maintain a balanced budget in the medium-term. However, greater changes may ultimately require treaty alterations the report maintains. To maintain credibility of the area\u2019s budgetary rules, it is crucial to implement rule changes and ensure compliance, the note concludes.<\/p>\n
GBP\/EURO \u2013 1.1624
\nGBP\/US$ \u2013 1.5616
\nGBP\/CHF \u2013 1.4439
\nGBP\/CAN$ – 1.5761
\nGBP\/AUS$ \u2013 1.5207
\nGBP\/ZAR \u2013 12.4588
\nGBP\/JPY \u2013 121.33
\nGBP\/HKD \u2013 12.1472
\nGBP\/NZD \u2013 1.9942
\nGBP\/SEK \u2013 10.4926<\/p>\n