Euro drops to four-year low against dollar
The Euro has dropped to a four-year low against the Dollar, after being hit by renewed fears over the strength of the eurozone economy.
Pound Sterling – UK Markets
The Pound dropped to a 13-month low after U.K. Prime Minister David Cameron revealed his government uncovered “very bad” spending decisions by the previous administration, and as a report showed London house prices fell for the first time this year.
Property website Rightmove said today that asking prices for British homes rose more slowly in May than they did in April, in a sign that the past year's rise in house prices may be cooling off.
The BoE expects a weaker Pound going forward as their quarterly report states that “It is possible that Sterling’s depreciation may be part of a more prolonged process of rebalancing of the UK economy, generating a fall in the long-run sustainable real exchange rate.”
US Dollar – US Markets
The US Dollar continues to consolidate its position as a safe-haven currency in an uncertain global economy.
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Euro – European Markets
The Euro fell to the lowest level against the Dollar in more than four years on concerns that European measures to reduce fiscal deficits will undermine the 16-nation currency region’s recovery.
The Euro has dropped for a third day against the Yen, ahead of a Eurozone finance ministers meeting in Brussels today, as European Central Bank President Jean-Claude Trichet calls for a “quantum leap” in how member states’ budgets are controlled.
Other Currencies – Highlights
The Swiss Franc and the Japanese Yen are also widely regarded as safe-haven currencies in the current environment.
The Australian and New Zealand Dollars have weakened as the volume of investors holding these currencies for their interest rate yield declines. New Zealand’s producer price indices and the minutes from the last meeting of the Reserve Bank of Australia are expected tonight so look out for some volatility in these currencies.
Thailand's baht falls have tracked a weaker euro and its weakness is still 'acceptable' and in-line with Asian currencies, says its Central Bank, amid domestic political unrest.