Cultural Currency, Current Affairs, Foreign Exchange

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Friday, 23 December 2011

What Will the New Year Hold for the Eurozone?

New Year, Finance, Curernt Affairs, fireworks

As the markets come to a close for the Christmas break the Pound is hovering just below 1.20 against the Euro at 1.198. With very little Economic data set for release today, markets appear to be settling at the current rate after a 6-month push that has seen Sterling grow from strength-to-strength. BBA Mortgage Approvals fell from 35.2K in October to 34.7K in November and the Index of Services released by the Office of National Statistics also declined from 0.7% to 0.2%; neither of these figures have had much bearing on the bigger picture.

Thursday, 22 December 2011

Currency Exchange News: UK GDP Increases in Q3

current affairs, shop, shut, recession

UK economic data released today from the Office for National Statistics shows that the economy grew faster in the 3rd Quarter than was originally thought. Strong services and construction output caused a 0.6% increase in GDP on the quarter – a revised figure from the initial 0.5%. However, the Office for National Statistics revised 2nd quarter growth from 0.1% to a stagnated 0.0% rate of change.

Wednesday, 21 December 2011

Pound Reaches 1.20 Against The Euro

current affairs, BoE, Minutes, economy

Yesterday Moody’s credit rating agency added the UK to its longlist of sovereigns on downgrade warning. They cited Britain’s ties with the Eurozone as the reason, stating that if the 17-nation bloc flares up the UK will not have the capacity to weather the storm: “a reduced ability to absorb further macroeconomics or fiscal shock.” The decision has not affected the Pound though and this morning saw Sterling grow against the US Dollar to 1.568 and against the Euro to a 12-month high of 1.202.

Tuesday, 20 December 2011

Germany Want Britain Back

Uncertainty in the Eurozone continues as Chancellor George Osborne refuses to give the IMF £25 billion towards its bailout fund for distressed countries. European finance ministers set out to raise €200 billion (£168 billion) to enable the IMF to assist some of Europe’s most fragile economies. Britain and some other non-Eurozone countries, however, failed to comply leaving the bailout fund €50 billion Euros short at €150 billion. Osborne expressed in a conference call to EU finance ministers that he would only pledge more funds to the IMF under a more global G20 setting; and that due to prior agreements only a further £10 billion would be available even then.

Monday, 19 December 2011

Britain Hit Back At French Jibes

clegg, cameron, current affairs, Europe

Currency exchange rates remain relatively unchanged as we enter the final week in the build-up to Christmas; the Pound is trading at 1.190 against the Euro and 1.548 against the US Dollar.

Friday, 16 December 2011

Currency Exchange News Slows Down as Christmas Approaches

christmas, current affairs, Currency Exchange, Cracker

With markets approaching the Christmas closedown and no fresh concerns for the Eurozone debt crisis (but also no meaningful progress) currency rates seem to be settling down for the festivities. The Pound is resting at 1.191 against the Euro and it looks set to stay at that rate unless Standard & Poor, Moody’s or Fitch announces a large European Sovereign credit downgrade earlier than expected. Recent UK economic data had little market impact; retail sales fell 0.4% in November – more than expected – and consumer spending has been reportedly weak in the build up to Christmas. The failed EU Summit is still the headline that investors cannot see past, and as a result periphery economic statistics are proving to have little impact on the GBP/EUR rate.

Thursday, 15 December 2011

US Dollar Benefits Most From LackLustre EU Summit

Euro, UK, Cameron, Current Affairs

Despite the Pound’s sterling performance against the Euro this week it has undertaken a steady decline against the US Dollar. The pair is currently trading at 1.552, with the Dollar benefitting primarily from strong currents of risk aversion flowing across the Atlantic from the Eurozone, like Eastern European immigrants in search of the American Dream. The failure of 2011’s 8th EU Summit to instigate a successful resuscitation plan for the single-currency has led to a profound drop in market confidence towards the Euro; the Pound has profited but the Dollar has boomed. The UK remains outside of the Eurozone and PM David Cameron’s treaty veto has isolated Britain further from the EU but the UK retains intimate trade relationships and constitutional laws with the Euro and for these reasons investors have viewed the USA’s geographical and (relative) political detachment from the Eurozone as a sufficient safety net against further Economic crises in Europe.

Wednesday, 14 December 2011

Sterling Surges as Markets Punish Merkozy

euro, decline, cartoon, merkel, sarkozy

The Pound has continued its surge against the Euro today and is currently trading above 9-month highs at 1.191. Markets are punishing the Eurozone for its lacklustre EU Summit measures, the talks in Brussels were billed as crucial for European resuscitation but they failed to inspire investors due to their lack of conviction. The affirmative actions that markets yearned for (Euro-wide bonds and increased ECB intervention) were denied and investors seemed perturbed by peripheral treaty change proposals (automatic penalty sanctions, sooner European Stability Mechanisms and €200 billion in bilateral loans).

Tuesday, 13 December 2011

US Economy Grows Despite Global Crisis

dollar, yen, euro, cartoon, crisis

Yesterday markets effectively rejected the Euro following Friday’s EU summit; funds flew in abundance towards the US, UK and Japan; risk correlated assets suffered wounds of up-to-and-over 1%. In terms of the Euro, little is likely to change today; Spanish and Italian bonds sold off well but were yielding very high interest rates; Germany’s ZEW Economic Sentiment survey improved but remains at a negative level; confidence in the Euro looks set to remain bearish.

Monday, 12 December 2011

Euro Weakens as EU Summit Fails to Inspire Markets

David Cameron, Up EURS, Current Affairs, Merkel, Sarkozy

Last week’s EU summit failed to inspire markets and as a result the Euro has weakened against the Pound and Dollar significantly today. The Sterling Euro rate has breached the significant 1.180 mark – a 9 month high – and is pushing past 1.182. The Euro has also fallen by over 1.25% to 1.321 against the Dollar as a result of the talks in Brussels. The Financial Times gave an undecorated summary of the summit’s failed efforts:

Friday, 9 December 2011

Britain Veto EU Summit Lisbon Treaty Changes

The EU summit in Brussels is taking centre stage today as the heads of states try to agree on a resuscitation plan that involves closer-knit fiscal union. The main policy changes include a permanent bailout fund, the European Stability Mechanism, which will take effect in July 2012. The ESM will be capped at €500 billion and will be controlled by the European Central Bank. Euro-states will be forced to keep their annual structural deficit of below 0.5% of GDP. If a member state breaches the 3% deficit ceiling there will be automatic penalty sanctions unless the majority of Euro-states agree against it. Euro area and other EU states will provide €200 billion in the form of bilateral loans to help deal with the crisis (this would allow increased bond purchases without breaking the ECB’s independency laws).

Thursday, 8 December 2011

Man Utd AND European Pain

Man Utd, Basel, Europe, Pain

Manchester United crashed out of Europe last night at the hands of Swiss minnows Basel and Nemanja Vidic will be feeling the pain as much as Ferguson; the Scot has only seen United drop out at the group stages 3 times in his 17 years as manager. Vidic suffered a painful knee ligament injury, and as Manchester United were evicted from Europe's premiere tournament, the Eurozone itself struggles to avoid a crippling injury that could kick-start a Global Financial Meltdown.

Wednesday, 7 December 2011


Current Affairs: Pound rallies arcoss the board on haven demand from the European debt crisis.
GBP/EUR 1.172 +0.73%
GBP/USD 1.568 +0.55%
GBP/AUD 1.531 +0.60%
GBP/NZD 2.022 +1.14%
GBP/CAD 1.588 +0.83%
GBP/CHF 1.452 +0.61%
GBP/JPY 121.932 +0.57%
GBP/ZAR 12.656 +1.13%

Cutting Edge Current Affairs Courtesy of:
Josh Ferry Woodard

Sterling Could Suffer At the Hands of US Dollar

money boat, dollar boat, recession, current affairs

The Pound is resting at a relatively unsettled 1.561 against the US Dollar, with daily lows of 1.559 and daily highs of 1.563. All eyes have once again been on Europe this week, with French President Nicolas Sarkozy and German Chancellor Angela Merkel discussing plans to tighten fiscal unity in the Eurozone in order to prevent economic downfall in the future. Credit rating agency Standard & Poor also drew attention to the Eurozone by putting 15 out of the 17 countries on credit watch with a view to downgrading them.

Tuesday, 6 December 2011

Currency News Roundup

eurozone, bad credit, Merkozy

An RBA interest rate cut in Australia from 4.50% to 4.25% has sparked a small selling spree of Australian Dollars. The high interest Aussie Dollar benefits from its seductively high yields, but the commodity currency is facing pressure as a bearish outlook looks to send investors elsewhere. The Pound has gained on the AUD despite Halifax House Prices falling by 0.9% in November.

Monday, 5 December 2011

Merkozy: The Sexual Sadists at the helm of the EU-rope

French President Nicolas Sarkozy and German Chancellor Angela Merkel made announcements today on the future of the Eurozone. The pair who are more and more frequently being referred to as 'Merkozy' restated an absolute determination to support the Euro and re-assert the single currency as a staple of the European Union.

This rather disturbing amalgamated image of the Franco-German leaders sends shivers down the spine; the measures proposed by the determined duo are somewhat more reassuring.

Italian PM Mario Monti Takes one for the Team

italy, austerity, Fornero, current affairs, cry

UK Purchasing Manager Index Services (PMI) increased to 52.1 points in November; a rise of 0.8 from October’s figure of 51.3. The result surprised analysts who had expected a drop to 50.7. Chris Williamson, Chief Economist at Markit Economics who compiled the statistic, warns against unwarranted optimism for the UK regardless of PMI scores higher than Germany (50.3) and the EU (47.5). “The service sector saw a modest expansion again in November, holding up in the face of growing gloom about the health of the domestic economy and heightened uncertainty regarding the Euro area’s debt crisis. However, with manufacturing contracting at a steep pace, the weak growth of services means the economy is likely to have stagnated in the fourth quarter.”

Friday, 2 December 2011

Will Markets Take Kindly to Merkel’s Long Term Resuscitation Plans?

Eurozone, Germany, current affairs, autobahn

The Pound has fallen to 1.162 against the Euro today despite German Chancellor Angela Merkel’s resolute stance regarding the implementation of Eurozone bonds and European Central Bank intervention. Many including US President Barack Obama have called for affirmative action, but Merkel has stood strong by her contention that enlisting the ECB as a lender of last resort would violate the central bank’s independence. Merkel is reluctant to initiate similar policies to the US and the UK where the Federal Reserve and Bank of England have stepped up asset purchases in the form of Quantitative Easing; she views this so-called solution as “fighting debt with more debt.”

Thursday, 1 December 2011

Are the Central Banks Planning a Eurozone Drop-out?

Eurozone, default, current affairs, evil

The Pound is trading at 1.573 today against the Dollar following yesterday’s coordinated action from the US Federal Reserve, Bank of Canada, Bank of England, Bank of Japan, ECB and Swiss National Bank to improve liquidity for banks. The 6 central banks agreed to cut the interest rate on dollar liquidity swap lines by 50 basis points.