Santa rally abates despite boost in risk appetite due to better US data
23/Dec/2011 • Currency Updates•
The pound edged up against the Dollar and Euro yesterday almost reaching the highs of the previous days.
Elsewhere, a survey revealed that a majority of business leaders back David Cameron’s decision to veto a new EU treaty designed to save the single currency. A poll of over 1,000 members of the Institute of Directors found more than three-quarters (77%) said the PM was right to refuse to sign up to Franco-German proposals at a Brussels summit this month, compared to just 19% who disagreed.
The Euro edged slightly higher in yesterdays trading versus the softer dollar as the risk appetite increase was underpinned by better US data. Demand was curbed slightly for the greenback but the Euro Zone remains plagued by uncertainty. Success at next weeks debt auction is crucial for Italy and Spain to ease concerns over both countries in 2012. As it stands at the moment, the Euro is hovering near all time lows against the Australian Dollar and steady against the safe haven Swiss Franc. Rating agencies seem to taken a pause in activity as markets enter the new year but currency analysts suggest the single currency will continue on a downward slide well into 2012.
The dollar was set to fall against most of its 16 major peers this week as Asian shares extended a global rally, damping demand for lower-yielding assets. The dollar dipped 0.3 percent to $1.3090 per euro first thing this morning. in London. It has lost 0.3 percent since Dec. 16 and is poised for its first weekly decline since Dec. 2. Consumer spending in the U.S. grew for a fifth month in November, increasing 0.3 percent and sales of new homes rose 2.6 percent last month, another survey showed before today’s report.