Daily Market Report 19/11/12

Three key developments to monitor

Last week respective concerns all around the world plagued the markets, prompting the speculation of numerous forms of action, .

Starting in the UK, fears that a strong pound is hindering export growth and evidence of a telling slowdown in retail sales caused Mervyn King to outline his temptations for further easing. On the back of this speech the pound slid heavily against its counterparts.

As the euro zone entered recession, a revelation that will further harm the UK’s struggling recovery, the main issue within the region was ensuring Greece didn’t default on its own maturing bonds. Safely secured for a few more weeks at least, the troubled nation will once again need to make headway to ensure its continuity past the New Year.

In America, fiscal cliff concerns led investors from the UK and euro, into the safety of the dollar. US Treasury Secretary, Timothy Geithner, claimed progress was made over the status of America’s budget, but still work remains. Sentiment reflects the encouraging news as the dollar weakened early this morning, as risk appetite slightly increased.

This week main currency movements are likely to be determined by subsequent the developments of these three issues. Following the notable sterling weakness last week, we could see a short-lived bout of profit taking, strengthening the pound, before a return to the familiar downward trend. This may represent a good time to buy dollars.


Key Announcements Today:
  • 15.00pm – USD – Existing Home Sales: expected to slightly increase to 4.76m

 

 See previous Daily Market Reports