Good morning and welcome to today’s foreign exchange market commentary on Tuesday the 22nd of November.
As developments in the EU remain rudderless and Moody’s warning that France’s AAA rating is under threat, exacerbating the fragile situation further – are the leaders of Europe planning for radical changes to ensure better integration among the member countries? Has the groundwork started for total economic and political union? Well, some of the Europhiles believe the fight-back has begun.
And it is led by none other than Jose Manuel Barroso – the president of the European Commission. Recollecting the war-ravaged continents dark days, Barroso said Europe has survived some of human history’s worst crises like the Soviet occupation or food shortage.
Another Europhile, Lord Heseltine of the British Conservative party, echoed Barroso’s sentiment, adding UK will eventually join the euro. He said the Germans and the French will ensure the common currency survives to ensure that the coherence created in the region continues. However, if euro fails, it would be a cataclysmic event for the British economy, he warned.
Wolfgang Schäuble – the German finance minister agreed. Despite the ongoing crisis, the common currency will emerge stronger, convincing all members of the European Union to join the euro, he said adding the Brits may join sooner than some people would like to believe.
CURRENCY RATES OVERVIEW
GBP/EURO – 1.1580
GBP/US$ – 1.5654
GBP/CHF – 1.4345
GBP/CAN$ – 1.6245
GBP/AUS$ – 1.5886
GBP/ZAR – 12.9971
GBP/JPY – 120.64
GBP/HKD – 12.2075
GBP/NZD – 2.0818
GBP/SEK – 10.6721
If your currency pairing is not listed above and you want to make an international money transfer, check out our comparison tables at www.mycurrencytransfer.com.
Euro: The Euro dropped to 1.3429 on Monday against the greenback before recovering later in the day. It closed at 1.3504, lower than Friday’s close of 1.3510. Rating’s agency Moody’s announcement that France may lose its AAA rating didn’t help the common currency either as investors ran for save haven assets like the dollar. The consumer confidence data for the region is expected later today. The Sterling however, remained supported against the euro as the EZ’s stability concerns refused to subside. The GBP/EUR closed lower at 1.1560 yesterday and is testing 1.1570 today.
USD: The cable dropped to a six-week low against the USD as risk remains off the table. Sterling is expected to remain under pressure as the market gets ready for another round of quantitative easing announcement as the UK economy shows signs of a slowdown. UK official public sector borrowing data – due today morning, and the US third quarter GDP data in the later half of the day may trigger some more volatility for the cable.
Elsewhere, the Japanese economy recorded a surprise 1.5 per cent growth in Q3, indicating a quick recovery from the natural disasters that had hit the country. However, exports dropped by 3.7 per cent during the period after the Yen hit record highs despite the central bank’s intervention.
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Have a great day!
