Weekly Market Update 08-08-2012

[Windsor02]

£/€
Range of the week: 1.2551 - 1.2630
Variance of the week on £10k=€79
Variance of the week on £1,000pm=€7.90

This morning we have had the Bank of England’s quarterly inflation report, with it likely to indicate no growth for 2012 compared with 2% predicted a year ago with Sir Mervyn King expected to be quizzed on the possibility of us cutting rates from 0.5% to try and promote some growth where QE has so far failed.
The focus still remains on the Euro zones weaker economies with Italy this week confirming a contraction in growth of 0.7% for the second quarter of the year. Italy's government has the biggest debt burden of any of the major Eurozone countries at 123% of GDP, which makes it particularly susceptible to a loss of market confidence - something that would make it impossible for the government to roll over its debts as they come due for payment.
Despite the austerity measures investors have continued to dump Italian sovereign bonds, which have pushed their yields close to unsustainable levels as markets fear a breakdown of the euro. However, investors are worried Italy may be next in line to suffer the same bailouts that have hit Greece, Portugal and now Spain.
The Euro has started to show signs in the last couple of days of strengthening back from it recent losses and we have seen us hit a level last seen at the beginning of July. This is despite continued focus of the sovereign debt crisis within Europe. However, one key figure of note Eurozone & UK GDP in the last 18 months, the EZ has grown by 1.0% and here in the UK we have shrunk by 1.2%, so maybe not too much of surprise no matter how much attention the media give to the Eurozone woes.


£/$
Range of the week:1.5545 – 1.5683
Variance of the week on £10k= $138
Variance of the Week on £1,000pm=$13.80

The major news this week was Michael Phelps doing his upmost to help the super power to return to growth by taking his Olympic Gold medal tally to an unprecedented 18 in total. But with each medal said to be worth in weight about £450 it is unlikely to make any major difference to the US economy!!

No major news of note, but with the ever looming Presidential election in November expect to see some movement in the coming months as the Fed try to pull the economy back onto its feet.


£/AUD
Range of the week: 1.4709– 1.4825
Variance of the week on £10k= AU$116
Variance of the week on £1,000pm = $11.60

Interest rates were left on hold as widely expected as growth within Australia continues, and concerns about a slowdown in China subside meaning the longer term outlook remains positive.

AUD, NZD, CAD & ZAR are all moving dependant of how investors are feeling, with the Euro-Zone seemingly dictating their risk on/off positions.


£/NZD
Range of the week: 1.8960 – 1.9223
Variance of the week on £10k=NZ$263
Variance of the week on £1,000pm =$26.30

No major news or data for the week so far


£/ZAR
Range of the week: 12.674 – 12.813
Variance of the week on £10k=ZAR1,390
Variance of the week on £1,000pm =ZAR139

No major news or data for the week so far


£/CAD
Range of the week: 1.5521 – 1.5645 (Currently testing the low)
Variance of the week: on £10k=$124
Variance of the week on £1,000pm =$12.40

No major news or data for the week so far.