Market Commentry

We had positive news out from the states as an agreement was reached by congress over the ‘fiscal cliff’ ensuring huge tax increases weren’t implemented at the beginning of 2013. Markets however soon realised that although positive to a certain agree with the matter having to be readdressed in a couple of months, the global economic crisis looks likely to continue throughout 2013. The main winner of the week was the USD as investors returned to the perceived safe haven of the greenback and we saw it strengthen some 2% against both the pound and euro whereas the EUR/GBP cross remained fairly range bound.

The week ahead sees a number of important eurozone data releases and it will be interesting to see if the tone remains the same as 2012, pretty poor with the odd glimmer of hope !! In the UK there is limited data and all eyes will be on the BoE and ECB monthly meetings which take place on Thursday. To be honest we are unlikely to see any change in policy with neither committee wanting to scare the markets this early in the year but it will be the tone and contents of the ECB press conference and the BoE minutes (released later in the month) that are likely to give un further insight into how things may pan out as we start the new year.

Hopefully by keeping in touch with your account manager here at Currency Index we can ensure you have a cost effective and successful 2013.