POUND STERLINGThe GfK Consumer Confidence survey, released overnight in the UK, was less bad than had been anticipated, which is the best that can be said about it. However, the Pound has moved forward against most of the other majors, with the exception of the US Dollar, on the day. This could all change next Thursday if the Bank of England’s nine-man Monetary Policy Committee commit more funds to Britain’s Quantitative Easing scheme. NEAR -TERM OUTLOOK – NEUTRAL.
US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.5628
The Greenback has strengthened during today’s session as global investors once again scale back on the appetite for risk and share markets drop-off. The move appears to have been triggered by the story that will not go away – Greece’s ongoing struggle to resolve its apparently untenable sovereign debt situation. This one could run and run… NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.
EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1614
Investors holding Euro-denominated assets are nervously awaiting the outcome of talks between Greek Prime Minister George Papandreou and EU leaders regarding Greece’s qualification for the next €8bn tranche of its bail-out funds. The Euro has lost ground throughout the day, in spite of a higher-than-anticipated whole of Eurozone CPI inflation estimate released earlier today. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.
AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.6020
The Australian Dollar has suffered another poor day in the currency markets, seeing the GBP AUD rate creep back above the 1.6000 level once again. The move has been fuelled by an increase in risk aversion amongst global investors, due to concerns over how the Eurozone’s debt crisis will play out. Next week could see a resolution to Greece’s debt problems – if this involves a partial default, then the Aussie could lose further ground. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.
CANADIAN DOLLAR– The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.6231
The Canadian Dollar has endured a shocking run in the currency markets over the past month as investors downgraded their growth projections for the global economy for the next two years. July’s Canadian GDP growth figures, released earlier this afternoon showed a monthly pick-up from June’s number, providing a boost for the under-pressure CAD and this month’s better-than-anticipated Michigan Confidence survey, released in the US this afternoon, holds out more hope that the Canadian Dollar may be able to recover soon. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.
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