Midweek Market Update 11-07-2012

[Windsor02]

GBP/EUR
Range of the week: 1.258 (Monday) 1.2682 (Today)
Variance of the week on £10k = €102

The GBP/EUR rate has hit a year high and now sits at its best level for 45 months (Oct 2008 still), but still only 5% up from the first working day of this year 7 months back.

Earlier this week, Eurozone ministers agreed to push 30bn Euros into the banking system to help the banks struggling to find their footing. This may have been priced in already to some degree as speculation over their ability to recover has been somewhat negative.

Eventually, once all options have been exhausted, and implemented, the hope is Europe as an economy will begin to cope on its own, prompting fresh investment from the rest of the world. The problem is that while the banks face further bailouts and support, fear is the cause of the Euros continued weakness as it detracts investors from depositing their money within the confines of the 16 nation single currency.

The UK has seen a mixed bag of positive and negative data. Improving inflation figures, further monetary easing, manufacturing figures boosted, UK economy shrinking further than expected in 2nd quarter of this year, retail sales increasing. News like this makes it hard for most to find a definitive opinion amongst experts as to whether we are going in the right direct or not. The fact sterling remains up against the Euro is not being attributed to the UK economy improving necessarily, but to the continued concerns effecting the Eurozone.


GBP/USD
Range of the week: 1.5470 (Monday) 1.5570 (Today)
Variance of the week on £10k = $100

Risk appetite does change like the wind and this is evident in the U.S Dollar.
The U.S is very similar to the UK is so many ways. Unemployment flagging, low interest rates, monetary easing a constant threat, trade balance figures digressing.
The Dollar may well be being driven by risk aversion (Investors taking refuge in the Dollar for its safe haven status), rather than being directly affected by its own economic stats and figures.


GBP/AUD
Range of the week: 1.514 (Today) 1.525 (Monday)
Variance of the week on £10k = AUS 110


GBP/NZD
Range of the week: 1.944 (Tuesday) 1.9560(Today)
Variance of the week: on £10k = NZD 120


GBP/ZAR
Range of the week: 12.67 (Tuesday) 12.87 (Wednesday)
Variance of the week: on £10k = ZAR 2000


GBP/CAD
Range of the week: 1.577 (Tuesday) 1.588 (Wednesday)
Variance of the week: on £10k = CAD 110