UK economy exited double dip recession

Pound Sterling

Despite the unexpected appointment of Bank of Canada Governor Mark Carney as the new Bank of England chief the Pound was able to gain, largely thanks to a report due for release this morning which is expected to show that in the third quarter the UK economy did exit its double dip recession. Confirmation of growth of 1 per cent is forecast by industry experts. Sterling climbed to a three-week high against its US counterpart but was largely unchanged against a broadly strengthening Euro.

The Pound is presently trading against the Euro in the region of 1.2351 and is trading against the US Dollar in the region of 1.6024

US Dollar

Fiscal cliff concerns caused the ‘Greenback’ to turn bearish against fellow safe-haven asset the Japanese Yen over the course of trade yesterday. Resolution in Greece then bolstered investor appetite for higher risk currencies and the US Dollar declined against several of its rivals, including the British Pound and Euro. Of interest today are US core durable goods and CB consumer confidence figures.

The US Dollar is presently trading against the Pound in the region of 0.6242 and is trading against the Euro in the region of 0.7697

Euro

Despite uncertainty during the day Eurozone finance ministers and the International Monetary Fund finally came to an agreement on tackling the Greek debt situation. After it was announced that Greece would have its interest rates cut and its repayment time extended the Euro was able to achieve a three-week high against the US Dollar and post gains against the majority of its other most traded peers. With little influential economic data scheduled for release today further movement is likely to result from additional announcements and developments in the US.

The Euro is presently trading against the Pound in the region of 0.8097 and is trading against the US Dollar in the region of 1.2972

Australian Dollar

After Eurozone finance ministers secured the long anticipated deal on Greek aid the ‘Aussie’ brushed its highest level for eight weeks against the US Dollar and advanced against the majority of its competitors. Any fluctuations in the Australian Dollar today will probably be the result of further Eurozone developments. The next piece of significant Australian data to be aware of is the Australian new home sales figures, released on Thursday.

The Australian Dollar is presently trading against the Pound in the region of 0.6539, is trading against the Euro in the region of 0.8061 and is trading against the US Dollar in the region of 1.0472

New Zealand Dollar

Following the news that Greece would be given longer to meet its debt obligations and would have interest rates cut the ‘Kiwi’ experienced upward movement. A fifth day of gains in Asian stocks also helped keep the currency trading higher against its peers despite a report showing that New Zealand’s annual trade deficit widened to the most for more than 36 months. The New Zealand Dollar could experience volatility today if there is more news from the Eurozone.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5129, is trading against the Euro in the region of 0.6332 and is trading against the US Dollar in the region of 0.8225

Canadian Dollar

The shock appointment of Bank of Canada Governor Mark Carney as the next governor of the Bank of England resulted in the ‘Loonie’ trading modestly lower against several of its biggest rivals. Carney had previously asserted that he wouldn’t be leaving the Bank of Canada so this sudden turnaround caused some rapid selling of the currency immediately after the announcement. However, the Canadian Dollar was able to recoup some of its losses as the initial shock wore off. A lack of Canadian economic data today means that fluctuations in the currency will primarily result from US statistics.

The Canadian Dollar is presently trading against the Pound in the region of 0.6291, is trading against the Euro in the region of 0.7766 and is trading against the US Dollar in the region of 1.0075

 

Richard Martin
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After working in business development for a major UK currency brokers for several years, Richard left Britain to help set up the company’s Australian office and now lives and works in Queensland; making the most of his new Down-Under lifestyle.