More positive week emerges from uncertainty for the euro and pound

Currencies Direct November 30th 2012 - 2 minute read

US: After a strong week, both the
pound and the euro have experienced further positives in the last
five days.

The pound and the euro both saw
positivity last week and have continued to do well despite times of
economic uncertainty in both Europe and the US bringing worry for
investors and reducing where they are spending their money.

On Monday (November 26th), the
euro performed brilliantly against the dollar, capitalising on both
the strong end to the prior week along with the easing of
conditions when it comes to bringing Greece out of debt. Both of
these aspects meant that the single currency would reach a total
of 1.3009 against the greenback at the end of business on
Monday, which was the highest figure it had recorded in November
until that point.

This would prove to be the peak of
the week for the euro though, and it failed to hold the
psychological level of sitting about 1.3000 until gaining it back
later in the week, with poor predictions about the US fiscal cliff,
due in January, dampening the spirits of investors on both sides of
the Atlantic.

On Wednesday, the euro dropped to
1.2882 against the dollar, with the 0.47 per cent drop carrying it
to its lowest total of the week. This would see another slight rise
on Thursday however, hitting 1.2952 to see the currency creep

Friday’s market was the undoubted
highlight for the pair though, with news coming out of the US
stating that the country’s consumer confidence had taken a turn for
the better, and reports saying that spending was up, leaving the
euro to see a final resurgence for a second week in a row to end
at 1.3027, regaining the psychological level.

Elsewhere, the pound saw yet
another good week, after continued good news coming out of the UK.
With consumer spending up, confidence getting ever
higher, and the banks once again lending to those looking to buy
homes, the pound would see an upsurge in fortunes towards the end
of the week.

At the opening of the five-day
period, the pound delivered on promises made towards the end of
last week, as it at last regained its 1.6000 level that it had been
so close to doing throughout the duration of the last few days of
last week.

However, the “jitters” in the US
which had seen the euro affected so badly were also stepping in the
way of the pound on Tuesday, and its positive march was halted by
poor fiscal cliff confidence, which saw investors the world over
stay relatively quiet.

It was later in the week that would
be the crowning glory for the pound however, following data coming
out of the UK. First of all, it was announced in GfK’s latest
consumer index that confidence among consumers was on the increase,
with a rise from the -30 seen a month ago, to -22 this month.

In addition to this, the amount of
money afforded to consumers for house purchases rose, with banks
approving 53,000 mortgages in October. This confidence saw the
pound rise to 1.6017 against the greenback on Thursday.

It was hoped that this would rise
further on Friday, and so it proved, as the pound rallied to
complete a good week, where it ended at 1.6030 against the

Written by
Currencies Direct

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