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Sterling volatility
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shanagarry
- CVO Legend
- Posts: 2048
- Joined: Tue Jul 27, 2004 7:26 pm
- Location: Craigweil-on-Sea
Sterling volatility
It doesn't take much now to knock the exchange rate mechanism 'skew-iff'. Only last night those who know about such matters were airing their views on the rise in UK inflation and potential interest rate hikes - then along comes this. I copied this from a circular I receive on a regular basis:
The Pound has declined heavily against the Euro this morning, slipping towards 1.17 by midday, while the UK currency also lost ground versus the majority of the 16 most actively trading currencies, falling to a low of 1.5627 against the U.S Dollar, as risk appetite deteriorated. UK stocks fell for the first time in five days, ending the longest upward surge in the FTSE 100 Index since September, amid concern that Moody's Investors Service was considering a downgrade in Spain's credit rating, as the threat of contagion in Europe spreads to other high-deficit regions.
The subsequent decline in risk appetite saw the Dollar and the Yen record gains across the board, as investors flock to the relative security of safe haven assets. In terms of economic data, the Pound also came under pressure, falling to a record low against the Australian Dollar, as UK jobless claims fell by less than expected in November, suggesting that the recovery in the labour market may be losing a bit of momentum.
The number of people out of work and receiving benefits declined 1,200 from October to 1.46 million. The Bank of England Deputy Governor Charles Bean said last week that the UK economic recovery remains on track but cracks are certainly showing. The Pound is currently trading at the lowest level against the Australian Dollar on record and the UK currency may remain under pressure this week.
The Pound has declined heavily against the Euro this morning, slipping towards 1.17 by midday, while the UK currency also lost ground versus the majority of the 16 most actively trading currencies, falling to a low of 1.5627 against the U.S Dollar, as risk appetite deteriorated. UK stocks fell for the first time in five days, ending the longest upward surge in the FTSE 100 Index since September, amid concern that Moody's Investors Service was considering a downgrade in Spain's credit rating, as the threat of contagion in Europe spreads to other high-deficit regions.
The subsequent decline in risk appetite saw the Dollar and the Yen record gains across the board, as investors flock to the relative security of safe haven assets. In terms of economic data, the Pound also came under pressure, falling to a record low against the Australian Dollar, as UK jobless claims fell by less than expected in November, suggesting that the recovery in the labour market may be losing a bit of momentum.
The number of people out of work and receiving benefits declined 1,200 from October to 1.46 million. The Bank of England Deputy Governor Charles Bean said last week that the UK economic recovery remains on track but cracks are certainly showing. The Pound is currently trading at the lowest level against the Australian Dollar on record and the UK currency may remain under pressure this week.
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maccasa
- CVO Legend
- Posts: 2677
- Joined: Tue Aug 09, 2005 12:13 pm
- Location: Kidderminster uk + Solferias
Re: Sterling volatility
The Ftse is up slightly now - record year high I believe - 5890 - yet the € is still up against the £?? damn odd!
Re: Sterling volatility
I wouldn't get too excited about these latest gyrations. There will be more news coming out before long and the Euro will taker another battering.
Pre Xmas markets can be more volatile due to end year operations , lower activity and too much champers at lunch time!
Pre Xmas markets can be more volatile due to end year operations , lower activity and too much champers at lunch time!