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Safe haven currencies outperforming in risk off environment

Whilst we saw a nice move for Sterling versus the euro on Friday with the pound moving from an opening level of around 1.1130 to finish the UK session at 1.1250( and this has held overnight to sit presently around 1.1265 ) all does not look rosy as the British Chambers of Commerce ( BCC ) have today added their voice to the grow¬ing chorus of concern about Britain’s faltering economic recovery. The BCC who represent privately owned businesses have warned that the pace of recovery had slipped back during the second quarter of the year and that while the Government’s austerity drive was necessary ministers had failed to come up with a credible plan for generating economic growth. The BCC have said that they believe that the economy has only grown by 0.3percent during the three months to June. The body’s director general explained that while the government had begun to restructure the economy not enough progress was been made. The concerns of the BCC were underlined by a separate survey from accounting firm Deloitte which said that the confidence of finance direc¬tors of Britain’s largest companies was now at its lowest level since the period after the collapse of Lehman Brothers In September 2008. A thirds of these directors now think that there is a chance of a double dip reces¬sion.
Data: No major data due today  


Top European union officials are set to meet in Brussels today to discuss the growing eurozone debt crisis amid fears that Italy could be the next country to be affected, They will also “ coordinate their positions “ on the sec¬ond Greek rescue package as Europe’s debt crisis threatens to deteriorate even further. Italy is the regions third largest economy and after Greece has the second highest sovereign debt ratio in the eurozone relative to its overall economy. Fears of eurozone debt contagion  was stoked by dramatic falls in Italian stocks on Friday.
Shares were dragged down by Italy’s banks which along with other European banks will learn the results of ‘stress tests’ later this week. Shares in Unicredit Spa , Italy's biggest bank , fell about 8% on Friday. The EU appears very concerned about what happened on Friday and key player have suddenly realised that this (contagion) is going to hit large economies and they have little defence.  
Data: No major data today


The dollar fell the most in three weeks versus the yen after the government’s payrolls report showed that em-ployers added fewer jobs in June than economists forecast and the unemployment rate increased to 9.2 per cent. Payrolls expanded by 18000 in June after a revised increase of 25000 the previous month the Labour de¬partment reported. The market had believed that we were going to see a figure of around 105000 and the un¬employment rate had been predicted to hold at 9.1 per cent. The Fed Chairman had said that the unemploy¬ment rate will come down “ very painfully slowly “ even after the pace of economic growth picks up starting in the second half of 2011. Data : No major data due today


• Chinese inflation and trade balance data released over the weekend has not fully impacted markets yet, though Oce¬anic dollars may weaken as data supports continued Chinese tightening.


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GBP/USD                        1.5960

GBP/EUR                        1.1265

EUR/USD                        1.4145

GBP/JPY                         128.90

GBP/AUD                        1.4925

GBP/NZD                         1.9135

GBP/ZAR                         10.7700

GBP/CHF                         1.3375

GBP/CAD                        1.5410

GBP/SGD                        1.9510

GBP/THB                         48.35

GBP/HKD                        12.4280

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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