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USD and Euro Both Weaken

USD and Euro Both Weaken

GBP gained favourably against both the US Dollar and Euro yesterday. The Dollar weakened yesterday despite durable goods orders beating expectations due to core orders being weaker than expected. Allied with continued confrontation between the US and Russia and the Fed rejecting capital raising plans by several banks. Three US units of foreign banks failed the Federal Reserve’s stress test. Santander and HSBC failed as did RBS which isn’t great news as the Government want to sell its US subsidiary.

The Euro also weakened yesterday due to the standard musings of ECB policy makers saying that even though deflation risks aren’t high, the bank will ease policy if needed and the ECB is willing to act if necessary but at the moment does not think it is necessary.

Down under, the New Zealand and Australian Dollars continue to strengthen. New Zealand posted a larger than expected trade surplus and in Australia, the Reserve Bank Governor explained how the country is in the early stages of transition from mining-led growth to domestic consumption.

In the UK, Nick Clegg and UKIP’s Nigel Farage debated Britain’s participation in the European Union which was widely acknowledged as being won by Farage. Farage argued that the UK would do better to negotiate its own trade deals away from the Eurozone whilst Clegg argued that this would cost jobs and economic stability.

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