Good morning and welcome to today\u2019s foreign exchange market commentary on Thursday the 14th of December.<\/p>\n
The ongoing EU crisis and the lack of clarity at policy level continue to weigh global markets down. To add to the euro zone\u2019s woes, consultancy Ernst & Young have predicted a double-dip recession for the region in 2012. The economies of the 17 member countries may actually shrink in the first six months of 2012 while unemployment is likely to remain over 10 per cent till 2015. The region may witness only 0.1 per cent growth for the whole of 2012, it warned. The fiscal consolidation measures announced last Friday in Brussels are a step in the right direction, the report observed, noting speedy implementation remains a challenge.<\/p>\n
Meanwhile, credit ratings agencies are on a overdrive and a handful of French banks were at the receiving end of Fitch yesterday. Standard & Poor\u2019s may go ahead and downgrade French sovereign AAA rating by Friday afternoon. Last heard, French Foreign Minister Alain Juppe was trying to convince markets that a ratings downgrade doesn\u2019t mean much \u2013 something known as \u2018setting the expectations right\u2019.<\/p>\n
On the other hand unemployment continues to bog the UK down though people claiming unemployment benefits actually came much lower than expected. The rise in claims was only 3,000 against an expectation of 13,700.<\/p>\n
Italian debt auction of \u20ac5 billion yesterday was successful though yield rose to 6.47 per cent. This is higher than 6.29 per cent that the country paid a month ago. The country needs to implement fiscal deficits down fast to convince markets that it is capable of servicing debts in the long-term. Paying more than 6 per cent for five year notes may prove catastrophic if it is unable to kick-start the economy. <\/p>\n
GBP\/EURO \u2013 1.1874
\nGBP\/US$ \u2013 1.5475
\nGBP\/CHF \u2013 1.4675
\nGBP\/CAN$ – 1.6041
\nGBP\/AUS$ \u2013 1.5603
\nGBP\/ZAR \u2013 12.9498
\nGBP\/JPY \u2013 120.6
\nGBP\/HKD \u2013 12.0418
\nGBP\/NZD \u2013 2.0628
\nGBP\/SEK \u2013 10.7992
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