EU Approves Rescue Package
Pound Sterling - UK Markets
This morning Sterling remains in the 1.54 region against the US Dollar, having recovered from multi week lows of 1.49. The Pound has also gained against the Euro, Yen and Canadian Dollar overnight.
Woolworths and MFI have gone into administration as the latest victims of the credit crunch. After a freeze on trading yesterday and failure to reach a rescue agreement, the company folded last night potentially taking 31 000 jobs with it. DSG International which owns Curry's, PC World and B&Q is the latest big retailer to show declining sales figures, posting a £29.8 million loss compared with £52.5 million profit a year ago. UK GDP figures yesterday showed declining growth across the board, including a 0.4% contraction in service sector, with only government services growing by 1%. Data yesterday also showed the slump in housing prices has slowed, falling just 0.4% in November and LIBOR rates continue to fall after dramatic interest rate cuts from the Bank. The next interest MPC meeting is the 4th of December.
US Dollar - US Markets
The US Dollar weakened overnight against the Pound and the Euro, declining by 0.54% and 0.31% respectively.
US data showed personal spending had fallen by 1% and equity markets remained bearish in their trends as negative statistics dominate the airwaves. China cut base interest rates by 1% yesterday and revised annual growth statistics down to 7.5%. Oil rose to $52 a barrel following the rate cut and as a result of confidence derived from the EU rescue package. There is no major data from the US for the rest of the week.
Euro - European Markets
The Euro has strengthened overnight, up to 1.29 versus the US Dollar following the approval of the European Union rescue package.
The 200 billion package is aimed at stimulating consumer spending and helping small businesses through the recession. It comes in addition to individual efforts from member countries as Germany, France, Spain, Italy and the UK have each pumped billions into their national economies. Data yesterday showed German inflation has fallen a full percentage point in November, led by lowering fuel costs. EMU Consumer Confidence data is due later in the day and the next ECB decision is on December 4.