Sterling holding on to gains against the euro
Sterling is holding on to gains against the euro as the euro zone debt crisis cast a shadow over the single currency. Last week saw sterling break above €1.19/£1 for the first time in 9 months as credit rating agency Standard & Poor’s put 15 of the 17 euro members on notice of a credit rating downgrade. The outlook for the UK economy remains fragile despite upward revisions to retail sales figures. In the run up to Christmas, it is a relatively quiet week for data but we still have the Bank of England’s meeting minutes and also final GDP figures for Quarter 3. Call in now for a live exchange rate.
In the euro zone, last week saw Belgium’s credit rating downgraded and France’s rating outlook downgraded to negative. Ongoing concerns over sovereign rating downgrades will keep the euro under pressure heading into the festive period. The main activity today that markets will be looking closely at is a conference call this afternoon between European finance ministers to discuss ways to boost IMF resources. Call in now for a live exchange rate.
In the USA, the US dollar strengthened overnight on safe haven demand as the news emerged of North Korean leader Kim Jong-il’s death. Political uncertainty saw investors buying US dollars to avoid riskier investments. Over the weekend, the Senate approved a $1trn bill to fund government spending and extended the payroll tax cut, but this has since been rejected by the Republicans. Risk sentiment is likely to remain subdued – call in now to ensure you don’t lose out.
Elsewhere, the Australian dollar slipped overnight as risk appetite fell due to the euro crisis and uncertainty over the situation in North Korea. Overnight into tomorrow the Reserve Bank of Australia releases its meeting minutes and the RBA is expected to maintain a downbeat tone. Get in touch now to ensure that you take advantage of better exchange rates.
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