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US retail sales figures helped level off last weeks slide in global markets

Last week was yet another volatile week in global markets, which was played out in currency values violent
swings. This was evident the most in GBP/CHF value which saw a massive swing of 14%, trading at 1.1465 on Tuesday and starting out today at 1.30. This was mainly down to SNB intervention which is discussed in more depth below. Friday saw cable post a small recovery as equities recovered somewhat and the dollar lost some of its ground. Sterling pulled back over a cent to see cable rally from below $1.62 to trade at $1.6312. This morning has however reversed some of those gains as UK economic data showed business confidence was falling. The Business Trends Optimism index from BDO fell to 95.1 in July from 95.6 in June. This also led to a small drop in GBP/EUR as we broke below the 1.14 handle. Britain's allure as a haven does seem to be stalling as global investors desert sterling amid the lowest inflation-adjusted bond yields on record and a faltering economy. The Chancellor of the Exchequer said on Thursday that the UK’s recovery will take longer and be harder, alongside the BoE Governor signalling a day earlier he may resume pumping cash into the economy to boost growth, something which would weaken the country’s currency.
No major data today, Nationwide Consumer Confidence later in the week.


The euro will remain under pressure this week as the German Chancellor and French President meet on Tuesday in Paris where they will discuss the major issue confronting the eurozone with regards to its spiralling debt crises. Friday saw a slight rest bite for the euro as financial markets levelled off after a turbulent week. This morning the euro faces new problems as Italy’s largest union threatens a general strike against an austerity package that Premier Silvio Berlusconi’s government hastily pushed through to balance the budget by 2013 and avoid financial collapse.  
France and Italy closed for Bank Holidays. No major data today.


A volatile week in global financial markets saw dollar strength last week as stocks dropped and safe haven currencies benefitted from the rout seen in equities. This altered slightly Friday as better than expected US retail numbers were posted, giving players confidence as the week was closed out on a positive. The big move for the greenback, as with other major currencies, came against the Swiss franc as the buck took 13% of its Swiss counterpart. We saw cable level off after weak confidence in the UK economy and with EUR/USD, tight trading ranges were seen as the euro continues its battle with the debt demons.
Data 14.00: TIC Long-Term Purchases 30.4B from 23.6B.


Swiss franc:
• The Swiss government and the central bank are in “intense” talks over a possible franc target to stem currency gains, according to a newspaper report . The plans are “ready” and the Swiss National Bank may set such a target in coming days. The talks are focusing on the role of the government and an “appropriate plan” may be adopted on August 17th.  The Swiss franc has lost 14% of its value versus sterling in the last week alone. Against the euro there has been a similar fall in the CHF value as we see EUR/CHF rally from 1.0082 to brake through the 1.14 handle.


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GBP/USD                        1.6275

GBP/EUR                        1.1376

EUR/USD                        1.4315

GBP/JPY                         125.09

GBP/AUD                        1.5628

GBP/NZD                         1.9450

GBP/ZAR                         11.6424

GBP/CHF                         1.2964

GBP/CAD                        1.61.09

GBP/SGD                        1.9645

GBP/THB                         48.45

GBP/HKD                        12.6901

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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