Pound Ceases… Along with the rest of Britain

In the news last night, its snowing… I think the sporting headline also showed that yes, it was snowing… However, in the economy we have sat down and debated the outcome of Christmas retails figures for this year. And once again, the snow could have an impact. I won’t talk about the weather; I think we have just about covered that.

Pound Sterling – UK Markets

With the year drawing to a close we have turned our focus to 2011. A notable constant in 2010 was the constant drop in house prices and with experts taking a view it is predicted that whilst the fall could continue into the early part of next year we may finally see prices stabilize and perhaps even creep up slightly. Latest figures have also shown that UK GDP expanded by just 0.7% in the third quarter, down from earlier expectations of 0.8%. With the VAT increase rising to 20% in January this lowered growth has coincided with this increase at the worst possible time and it is expected that along with government spending cuts, growth figures are likely to slow further in 2011.

US Dollar – US Markets

As the federal bank continues it’s temporary Dollar liquidity swap arrangements with the other major central bank counterparts the cable has continued to creep up on Sterling. With very little data out today, market reactions have reacted accordingly showing very little movement thus far. However, we are expecting house sales data later on in the day and it may be worth speaking to your broker to gauge the markets reaction to this.

Euro – European Markets

Ratings agency Moody’s has put Portugal on review for a potential downgrade which subsequently saw the single currency drop to a record low versus the Swiss Franc. This has put increased fiscal pressure on other countries in the region as investors seek the safe haven of the ever strong Swiss Franc over the Christmas period.

Other Currencies – Highlights

The Canadian dollar fell to its lowest level in nearly 3 weeks versus the US Dollar as reports showed that inflation slowed. This overshadowed news that retail figures rose more than forecast. On the back of the Australian Dollar’s strong performance over the past couple of weeks, New Zealand’s Dollar has recorded a near 10 year low against its Aussie counterpart as well as stating that their economy almost stalled in the third quarter. For a live quote or to tell us about your foreign exchange requirements, please call us on +44 (0)20 7740 0000.