Pound: Sterling hit a five week high against the dollar yesterday, tracking a rally in the euro as investors cheered a draft conclusion from a euro zone summit which raised confidence that the region would solve its debt problems. The pound was boosted against the U.S. Currency but it suffered versus the euro, which recov-ered early losses after a draft showed the euro zone’s bailout would offer loans to weak countries at lower rates and longer maturities. In late London trade, sterling rose nearly 1 percent on the day to $1.6308, its strongest since mid June. It barrelled through key technical resistance which opened the door to more upside in the short term. No major data due today.
Euro: The euro advanced to the highest level in two weeks against the dollar as European officials eased the terms of loans for cash-strapped nations and expanded aid for Greece, reducing contagion concern. The bailout will cut the country’s debt by 12 percent of GDP from its current 140 percent level and see the EU’s bailout fund given sweeping new powers. The deal, fronted by French president Nicholas Sarkozy, will also see most private holders of Athens’ debt take a 20 percent cut in the value of their bonds. As details emerged, the euro gained over 1 percent against the greenback between yesterday morning and evening, rising to $1.44 in the afternoon and rising 0.8% against the Swiss franc in the same period.
Data 9.00: German Ifo Business Climate.
Dollar: The Federal Reserve has started making contingency plans should the US government default on its debts, as talks in Washington over raising the country’s debt ceiling dragged on for another day. With the US unable to pay all its bills unless the $14.3 trillion ceiling is raised by August 2, financial regulators in the US are working through the possible consequences according to a senior official at the central bank. Despite repeated warnings of the financial disruption that’s likely to ensure from a default. The White House, and both parties in Congress, appear no closer to striking a deal as this week draws to an end. President Barack Obama and the Republicans and Democrats are trying to reach an agreement on how to cut America’s long-term deficit as a condition of raising its debt ceiling.
No major data due today.
General:
• Canada’s dollar appreciated to the strongest level in lore than three years versus the greenback after statements this week from the Bank of Canada led investors to raise bets interest rates will increase this year.
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GBP/USD 1.6300
GBP/EUR 1.1310
EUR/USD 1.4410
GBP/JPY 128.25
GBP/AUD 1.5030
GBP/NZD 1.8890
GBP/ZAR 11.02
GBP/CHF 1.3430
GBP/CAD 1.5380
GBP/SGD 1.9700
GBP/THB 48.50
GBP/HKD 12.70
red-down; blue-up (snap shot)
These rates are for indication purposes only.
For more information or to get the latest spot rates contact:
John Paul Georgiou
Senior Foreign Exchange Broker
+44 (0) 20 7959 6917
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