Good morning and welcome to today’s foreign exchange market commentary on Friday the 16th of December.
As 2011 draws to an end, many may wonder what 2012 holds for us. If you are hooked to the media (which most of us are!), the picture turns rather gloomy. Talks of an imminent European recession, near zero-growth in the US in 2012 and a slowdown in China and other emerging economies, 2012 doesn’t look pretty.
Latin America is exposed to lower commodity prices (they are big exporters of commodity) as the advanced economies and China slows down, CEE countries are exposed to the EZ and a volatile political climate in the Middle East will continue to push oil prices up, further constraining global growth. In other words, the ride’s looks bumpy in 2012.
Germany has managed to beat the tide though till now. Previously German services PMI data was showing growth in the whole of Europe. Latest manufacturing data came stronger than expected, springing another surprise. While one swallow does not make a summer, it certainly gives some reason to cheer about. US jobless claims dipped to its lowest since May 2008. If the growth momentum is maintained –though a weak EU poses significant growth risk for the US as well, the picture may get brighter as we move forward. The four-week average unemployment benefit is now 387,750, below the crucial 400,000 mark. Whether this is spike due to Christmas temp work will become evident as we move through January.
CURRENCY RATES OVERVIEW
GBP/EURO – 1.1906
GBP/US$ – 1.5508
GBP/CHF – 1.4594
GBP/CAN$ – 1.6002
GBP/AUS$ – 1.5531
GBP/ZAR – 12.9772
GBP/JPY – 120.84
GBP/HKD – 12.0741
GBP/NZD – 2.0409
GBP/SEK – 10.7912
Making an international money transfer? Compare prices and start saving today.
EUR: The single currency managed to claw-back some of its successive losses yesterday against the greenback. The ratings bug is still biting the banks. Fitch downgraded a slew of banks yesterday including the biggies of Wall Street – Goldman Sachs, BofA, Deutsche Bank and Citigroup, citing worsening global economic conditions rather than liquidity issues of the banks. The EUR/USD pushed back above the 1.3000 level yesterday and the pair opens higher at 1.3029 this morning.
USD: Demand for safe have currencies eased yesterday and the GBP/USD didn’t show much movement in early trade. Sterling however gained against the greenback on stronger Philly Fed manufacturing and lower than expected US unemployment data. Investor’s interest in the global reserve currency was lower and the GBP touched a high of 1.5540 against the USD yesterday. The GBP/USD pair opens at 1.5523 today, but the gains can be pared over negative European developments.
Going on holiday? Why not compare travel money through our sister site MyTravelMoney.co.uk and start saving!
Have a great weekend!
