Pound:
GDP growth for Q3 in the UK came in higher than expectations at 0.8%. This is down on last quarters 1.2% eye watering rise however bodes well for an economy entering a difficult period with Public spending being slashed. A lot of commentators must have been sharpening their pencils ready to declare imminent double dip recession with Mr Osbourne having to answer a lot of difficult questions, this figure at least gives the coalition time to try and turn the Public finances around and it also installs the all important confidence every economy cries out for. Construction provided the main growth however other sectors held their own which should hopefully keep the momentum going for the near term. GBP had a strong rally on the back of the figure rallying 2 cents against the EUR and over a cent against USD. Early trading today shows that it is holding the levels against the EUR how¬ever has given some back against USD. Calls for Interest rate rises are premature however and hopefully the MPC will knock these back publically.
DATA: No data
Euro:
With both the USD and GBP climbing, the loser from this yesterday was the EUR. Having seen particularly strong growth for the past month or so a retracement was perhaps on the cards however does show the almost impossible task of trying to predict where next? Europe’s debt woes came back to prominence yesterday with the Greek Premier vowing to liberate the nation from “Slavery and surveillance” Political upheaval in Greece did not go down well with the markets and this sentiment was then reinforced by bond giant PIMCO warning Greece will default within 3 years. It seems a lot of Europe is striking and apart from Germany which is powering ahead with rising exports it is difficult to see how the rest of the economy can flourish especially with EUR at these giddy heights.
DATA: M3 Money supply; German CPI m/m; French Consumer Spending m/m
General:
I Australia headline inflation came in lower than expected at 2.8% while core figure slipped to 2.5%. It blatantly showed that Interest rates are the key to the Aussie dollars strength of late as AUD immediately tumbled.
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| GBP/USD | 1.5810 |
| GBP/EUR | 1.1445 |
| EUR/USD | 1.3810 |
| GBP/JPY | 129.45 |
| GBP/AUD | 1.6280 |
| GBP/NZD | 2.1212 |
| GBP/ZAR | 11.0812 |
| GBP/CHF | 1.5622 |
| GBP/CAD | 1.6272 |
| GBP/SGD | 2.0601 |
| GBP/THB | 47.42 |
| GBP/HKD | 12.4416 red-down; blue-up (snap shot) |
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John Paul Georgiou
Senior Foreign Exchange Broker