Eurozone Dips Back Into Recession
16 November, 2012
Thursday saw a mixed day for sterling which made gains against the US dollar but losses against the single currency. The markets were moved by investor sentiment as the trouble in the middle east caused investors to be more risk averse. We saw the pound make 1 cent gains against the more risky currencies like the New Zealand and Australian dollars and to some extent the more volatile South African Rand, although against the usually safe haven US dollar the Pound did make ground.
Normally in such risk averse situations the dollar is seen as the “comfort blanket” to investors but as the concern is in the middle east, the main supplier for oil, the dollar was less favourable. Concern on supply as trouble escalated throughout the day caused equity markets to fall and the dollar to weaken.
The Euro on the other hand benefitted, despite the poor growth data out from Spain and Italy and the Eurozone overall. Traders seemed to be reluctant to sell off their positions with the thought in mind ministers would act quickly to resolve the deepening crisis. With Greece needing to repay some debt today, any shortfall should hurt the single currency, unless of course investors see this as a trigger to sort out the package the Greeks are looking for quickly next week when they meet.
Eurozone trade balance is due today along with current account balance and with a lack of any UK data it could be another day for the Euro. Stateside we have a few minor releases culminating in a speech this evening by Fed member Lockhart so cable could be very different come Monday to where we close this afternoon.
So with uncertain times ahead, those looking to send money overseas would be wise to speak with one of the experts at Currency Index for some friendly guidance to the peaks and troughs of these volatile markets. Let us help you make the most of your funds through one of the many currency tools available to us by speaking with us today.
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