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UK Nationwide Consumer Confidence data shows a decline to 51

Pound: The pound had a mixed day yesterday as we saw gains made against  a falling dollar but  a drop against the euro. Taking the pound’s position on its own merit, things aren’t looking good. According to the OECD the UK economy is at a near standstill. UK consumer confidence is also falling as the June figures showed Britons grew more pessimistic about the outlook for the economy and spending. The Nationwide Consumer Confidence report showed a decline from 55 the previous month to 51 for June. Now add that to rumours that Germany and France have come to some sort of pre agreement ahead of today's EUR summit concerning the Greek debt issue, and we can see why GBP/EUR has fallen off yet again. The pound has now given up one and a half cents against the under pressure single currency this week. If today’s EU summit comes up with any kind of positive outcome for the euro, we expect this move in GBP/EUR to continue, but if negative signals come out, then maybe a recovery for the pound may be on the cards. Cable on the other hand is a mirror image of GBP/EUR, as we saw more gains for sterling against the US dollar. This currency pair is more to do with risk appetite and positive moves in global stock markets. Yesterday stocks rallied on the back of anticipation the US and EU debt worries may be coming close to a positive outcome. This saw stocks rise as investors came out of dollar positions and into mother currencies, namely the pound. Data 09.30: Public Sector Net Borrowing 11.8B from 15.2B + Retail Sales m/m 0.5% from –1.4%.


Euro: Gains across the board for the euro yet again as the single currency rose for a third day against sterling and the dollar after Germany and France reached an agreement on addressing Greece’s debt crises before a summit convened to prevent contagion in Europe’s bond markets. The 17-nation currency also climbed to the highest level in a week against the yen as the joint Franco-German position is presented at today's meeting in Brussels. Currency strategists at Barclays stated Germany and Frances agreement indicates their intention that they wanted some preparation for today’s summit, adding its hard to sell the euro for the time being because of expectations for the region’s coordinated attitude. The single currency has now moved over 1% higher this week on the pound to trade around the 0.8820 level, and against the dollar we have seen over two cents gains as EUR/USD came close to breaking through the $1.43 handle. Data All Day: EU Economic Summit.


Dollar: Stock market rallies, gains in risk appetite all led to a lower dollar as it fell against both sterling and the euro. Speculation policy makers are moving closer to resolving a deadlock on US borrowing and to finding an agreement on Europe’s debt crises leading to dollar weakness. The dollar Index declined for a second day as the US currency slid versus most of its major peers tracked by Bloomberg. Equities may well continue to rise since the main funding currency is the dollar, the net effect being dollar-negative. The greenback slipped to $1.4250 on the euro and came close to breaking through the $1.62 handle versus the pound. Data 13.30: Un-employment Claims 409k from 405k. 15.00: Philly Fed Manuf Index 2.7 from –7.7. Speakers 13.30: FOMC Evans. 15.00: Fed Chairman Bernanke.


• Today’s EU Economic Summit is crucial not only for the single currency, but also for the UK as 40% of  the UK’s trade is with the eurozone. The summit taking place today will be attended by heads of state from Eurozone countries, as well as ECB President Jean-Claude Trichet and IMF head Christine Lagarde are due to meet about a second support package for Greece and financial stability in the Euro area.  


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GBP/USD                        1.6160

GBP/EUR                        1.1341

EUR/USD                        1.4245

GBP/JPY                         127.26

GBP/AUD                        1.5078

GBP/NZD                         1.8869

GBP/ZAR                         11.0969

GBP/CHF                         1.3244

GBP/CAD                        1.5306

GBP/SGD                        1.9600

GBP/THB                         48.32

GBP/HKD                        12.5975

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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