Good morning and welcome to today\u2019s foreign exchange market commentary on Friday, the 29th of June.<\/p>\n
Yesterday\u2019s economic report confirming the UK has slipped into a double-dip recession confirms what some economists have been long claiming; the economy is in terrible shape and showing no signs of recovery. And everyone from the Prime Minister to central bank Governor Mervyn King to every city economist has blamed the euro crisis for UK\u2019s woes. It\u2019s understandable for a central banker or a politician pushed to the corner. However, there\u2019s only one problem. It\u2019s hogwash!<\/p>\n
UK\u2019s problems are entirely home grown. And it can be solved at home as well. Unless the Brits start taking responsibility, there\u2019s little hope that the stock market or the currency will recover.<\/p>\n
It\u2019s been four years since the meltdown struck, and the economy is barely breathing. With exports dropping 8.6 percent last month, trade deficit has widened than originally estimated. This is already the longest recession on record. It\u2019s true that a major economic crisis unfolding at your door-step doesn\u2019t particularly help. But that won\u2019t explain how badly the UK is doing.<\/p>\n
Take the case of Germany. It\u2019s in the thick of the EU crisis. But Germany grew at 0.5 percent in the last quarter and is slated to grow by 1 percent in 2012. Not great, but better than the UK. Or take Sweden, or Norway. Both are on the borders of the single currency zone and should be hit as badly as London. However, Sweden grew by 0.8 percent last quarter and should grow by more than 1 percent this year. Norway should grow by 2.7 percent this year, a number that would be counted as boom in Britain.<\/p>\n
So what went wrong?\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u2026 to be followed on Monday.<\/p>\n
CURRENCY RATES OVERVIEW<\/strong><\/p>\n GBP\/EURO<\/strong> \u2013\u00a01.2410 EUR: The single currency experienced downward pressure on Thursday with the 17-member euro tumbling to a 3 week low against the greenback after a German official was quoted saying that the Brussels summit will not bring any detailed decisions. The softer than expected German employment data and the sharply higher yield at Italian debt auctions soured risk sentiments further. The common currency was further pressured as Spanish 10-year bond auctions traded at yields higher than the sustainable seven percent mark; ensuring cable remained well supported in the 1.2458-1.2521 range. However, the fortunes of the single currency changed in overnight trading with the EUR\/USD surging by over 1.5 percent on news that the conditions on recently sanctioned loans to Spanish banks would be relaxed. The GBP\/EUR also reversed its course, touching a one week low of 1.2362. Market focus would remain on the EU summit today as the GBP\/EUR opens at 1.2428 this morning.<\/p>\n USD: The cable slipped to a two-week low of 1.5486 against the greenback yesterday in late afternoon trading as the final iteration of Q1 UK GDP confirmed the country has slipped into a double-dip recession while a separate report showed the current account deficit has widened more than anticipated. This understandably will strengthen the case of the dovish members for another round of QE when the BoE MPC members meet next week. However, the trigger for the Pound\u2019s weakness came from elsewhere after a German official said the EU summit is unlikely to bring any detailed decision on the ongoing crisis, sending investors running for cover to the safe-haven JPY and USD. Sterling has been pushed higher overnight by a surging EUR\/USD pair despite the latest Gfk NOP report revealing UK consumer confidence has hit the bottom in June. The GBP\/USD opens at 1.5620 today morning.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Good morning and welcome to today\u2019s foreign exchange market commentary on Friday, the 29th of June. Yesterday\u2019s economic report confirming the UK has slipped into a double-dip recession confirms what some economists have been long claiming; the economy is in terrible shape and showing no signs of recovery. And everyone from the Prime Minister to central bank Governor Mervyn King […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[110],"tags":[],"_links":{"self":[{"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/posts\/2084"}],"collection":[{"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/comments?post=2084"}],"version-history":[{"count":2,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/posts\/2084\/revisions"}],"predecessor-version":[{"id":2086,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/posts\/2084\/revisions\/2086"}],"wp:attachment":[{"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/media?parent=2084"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/categories?post=2084"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mycurrencytransfer.com\/blog\/wp-json\/wp\/v2\/tags?post=2084"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nGBP\/US$<\/strong> \u2013 1.5628
\nGBP\/CHF<\/strong> \u2013 1.4916
\nGBP\/CAN$<\/strong> – 1.6022
\nGBP\/AUS$<\/strong> \u2013 1.5394
\nGBP\/ZAR<\/strong> \u2013 12.9788
\nGBP\/JPY<\/strong> \u2013\u00a0124.36
\nGBP\/HKD<\/strong> \u2013\u00a012.1321
\nGBP\/NZD<\/strong> \u2013 1.9597
\nGBP\/SEK<\/strong> \u2013\u00a0 10.896<\/p>\n