Pound and Euro Continues to Slide while Sterling is on Boost

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.

Cash and income timing from a UK Pension or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, QROPS and now QNUPS (Qualifying non UK Pension schemes).



Sterling rallied against the euro yesterday as investors looked beyond the Irish bail out to the possibility of further euro zone nations also requiring help. On-going concerns about whether more euro zone nations such as Spain and Portugal will require bailouts is likely to continue to affect the price of the euro until markets are satisfied that the matter has been put to bed one way or the other.

The euro weakness was not replicated against the US dollar and we saw a completely different story as the pound tumbled to a two month low off the back of news that the UK cut its growth forecast for 2011 and nudged up its expectations for public sector borrowing in the mid-term.

"Sterling is getting dragged around by sentiment in the euro zone. While it is modestly outperforming the euro, it's taking a hit against the dollar," said currency strategist at ING.

He added that the latest selling in higher-risk assets would provide a good chance for investors to book profits on dollar-funded positions ahead of the year end, which would keep the dollar in demand, while possibly dogging sterling for now.

On top of this sterling’s gains are likely to be limited due to the stalling of any significant return to form of UK data, the data out of the UK has been inconsistent at best and mostly limited to snippets of good data amongst a mixed bag rather than the steady flow of good data that the markets are looking for. This was followed up yesterday with the Office for Budget Responsibility raising its growth forecast to 1.8% from 1.2% that it forecast in June, but it cut its 2011 forecast from 2.1% from 2.3%.

The UK housing market was also dealt another blow yesterday with data that showed the number of British mortgage approvals fell to its lowest in 8 months in October and separate data also showed that houses fell in price.

At the close of play yesterday sterling was up around 1% on the day against the euro trading at 1.1870, against the US dollar sterling was down around a cent on the day closing the day at $1.5545.

The euro remained under pressure from USD with the greenback making significant gains throughout the day (EUR/USD) and closing around 1.31 having begun the day over 1.33.

If risk aversion continues to be the key theme moving forward expect the US dollar to benefit off the back of it with the euro being the biggest loser with more potential euro zone bad news to come.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.
This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.

Waltz of Currency and its influence on Exchange Rates

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.

Cash and income timing from a UK Pension or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, QROPS and now QNUPS (Qualifying non UK Pension schemes).

The pound continued to make losses against a broadly stronger dollar on Friday as risk aversion continued within the markets.

Sterling reached a two month low against the greenback of $1.5587 down over 1% on the day from the earlier session high of $1.5770.

The dollar gained against all 16 of its most traded counterparts as concern over the conflict between North and South Korea increased the demand for the safety of the US currency.

The euro continued to weaken as it came under heavy selling pressure on the increasing worries the debt crisis currently in the euro zone will spread beyond Ireland and Greece. Many analysts are now speculating Portugal may be next to resort to seeking financial aid. The pound rallied against the single currency in the morning session as it reached a day’s high of €1.1872 but during the afternoon fell back to trade around the €1.18 mark.

The single currency fell broadly after a report in Financial Times Deutschland said a majority of euro zone nations and the European Central Bank were urging Portugal to apply for a bailout, though European officials denied this, as well as the Portuguese government which said the reports were “completely false”.

The euro also fell over one cent against the dollar to $1.3202 on Friday, it has now fallen by almost four cents, or 3% this week.

Many analysts are stating sterling is seen as a better bet than the euro at the moment, but there are still concerns over the UK’s exposure to euro zone debt which could result in sterling continuing the current run of weakness against the dollar, which has recently improved on safe haven flows and stronger than expected US data.

The UK also saw a report from the UK’s Land Registry on Friday which showed house prices in England and Wales fell 0.8% in October which is the biggest monthly fall since February 2009.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.

This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.

UK Economy in Recovery Phase - Economists suggest 16-nation common currency split

We continue our daily look at factors affecting currencies allowing some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.

Investment market volatility and currency exchange remains a challenge. Things are still very volatile and we are in unique global influencing territory. In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions, QROPS and now QNUPS.

Thursday was a pretty flat day with regards to market data, as the Americans enjoyed a big feast on the back of Thanksgiving.

In the UK, a number of MPC officials including Bank of England Governor, Mervyn

King, faced the Treasury Select Committee to discuss the November Inflation Report and the CBI Distributive Trades survey.

The Inflation Report showed that the UK economy continues its steady, albeit slow, pace of recovery from the deepest recession in seven decades. Even though global demand remained weak and output along with global recovery remained fragile, the report judged GDP growth to be above its historical average throughout the upcoming period.

Inflation is expected to remain above the desired 2% rate, which could pressure the Committee to hike interest rates, a call that MPC member, Andrew Sentence has been pursuing since July.

The CBI’s trades survey data was also better than expected, rising to +43 in November from +36 in October. Retailers were confident that this trend upwards will continue with an expected for December of +45. However we must remember that the rise in VAT at the start of next year may well cloud the longer-term outlook.

The euro came under renewed pressure yesterday, dipping close to a two-month low against the dollar as euro zone debt woes, showed little signs of abating, keeping investors nervous.

Traders said Portugal and Spain were increasingly closing in on the need for financial assistance, while Ireland’s belt-tightening measures came under attack for sticking to optimistic growth assumptions.

Most economists in the Britain and the United States, have suggested the 16-nation common currency launched in 1999 could split because of the peripheral countries’ high debts and deficits, together with a loss of competitiveness with Germany. Senior euro zone officials dismissed any risk of the single currency area breaking up even though financial markets forced the borrowing costs of Portugal and Spain to record highs.

The euro tumbled earlier this week after Angela Merkel, the German’s Chancellor, alarmed markets by saying the single currency was in an “exceptionally serious” situation.

In the Far East we saw South Korea’s defence minister resign, two days after an attack by North Korea and amid criticism the response by the South was too slow.

President Lee Myung-bak accepted his minister’s resignation “to improve the atmosphere in the military and to handle the series of incidents”, a presidential official said.

The events that have occurred in this part of the world, has clearly got investors very nervous and therefore averting from piling into risky assets and buying the safe haven currencies like the US dollar and Swiss Franc.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier’ climates. This with the re-assurance and security of UK authorised and regulated advice – essential tools for your security.

Sterling Takes a Hike, Pound Slumped to a Week Low

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.

Cash and income timing from a UK Pension or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, QROPS and now QNUPS (Qualifying non UK Pension schemes).

After a torrid day for the euro zone which has seen much political uncertainty and economic worry over the past week, sterling took advantage of euro weakness climbing to a 2 month high €1.1837. However the pound slumped to a near 4 week low of $1.58, as most investors sold risky assets opting for safe havens.

Sterling is still perceived to be a risky currency, and whilst the Irish political situation stands in the way of a confirmed bailout plan, the dollar is seen to be the safest investment. The euro lost around 1.5% on the day against the dollar, moving below the $1.34 mark, and the attack on a South Korean island by neighbours North Korea damaged market sentiment further.

The market faces a waiting game on the detail of the package, a government surviving on the slimmest of majorities, and a strong belief that even if Ireland is ringfenced through aid, Portugal will become the next fashionable focus," said strategists at Credit Agricole CIB.

Analysts say Britain stands to gain from the stabilisation of the Irish banking system, with the Bank for International Settlements estimating UK banks had $222.4bn exposure to Irish borrowers as recently as September 9th.

In other data releases, there were more negative signs on the state of the UK housing market on Tuesday as the British Bankers' Association said UK mortgage approvals fell to their lowest in more than 1-1/2 years in October. Consensus expected a slightly improved figure from 31.1k in September to 31.3k; however the figure came in at 30.7k.

Germany and the rest of the euro zone did produce some fairly positive data, but the data was brushed away with all eyes firmly on the political situation. German GDP for Q3 came in on par with consensus at 0.7%, bringing the total growth for 2010 to 3.9%. Both German and euro zone PMI figures were also very positive.

In the US Q3 GDP figures were revised up slightly from 1.7% to 2.5%, consensus predicted a 2.4% figure, however existing home sales were down in October from the consensus figure 4.48M to 4.43M.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.

This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.

Euro Continues to Slide, Sterling Enjoying the Boost

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.

Cash and income timing from a UK Pension or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, QROPS and now QNUPS (Qualifying non UK Pension schemes).

The euro zone debt crisis largely overshadowed any economic data releases, on a day that saw the single currency continue to slide and government bonds show signs of intense stress. Despite figures out of Germany that showed business sentiment is stronger than ever, (an increase to 109.3 in November from a revised 107.7 in October) and efforts by European politicians to place a positive spin on recent events, investors chose to follow their nerves within the marketplace. Overnight the ratings agency Standard & Poor’s reduced its credit rating for Ireland to A from AA-, citing concerns over the scale of the country’s bank bailouts. The announcement was far from positive, but the lack of immediate reaction from the currency markets outlined a far more serious overview. Sentiment revealing concerns over the whole structure of the euro, rather than over any of its individual member states, has begun to arise within the market.

“People are wondering what the end game is here, and investors see no last-mover advantage…they want to get out now,” said a senior currencies analyst at The Bank of New York Mellon, in London. “It’s just theoretical now, but it’s not impossible that one of the euro members might leave.”

At one stage the euro dropped to $1.3309 against the US dollar, which has not been seen since September. The only source from which the single currency could draw a positive movement was data released from the United States. Orders for durable goods in the US took the biggest drop in nearly two years during October (a decrease of 3.3% to a seasonally adjusted $196.05 billion). Further poor data came in the form of a fall in new home sales in October and a drop in the Housing Price Index for the month of September. The Greenback was helped however by a fall in jobless claims from a previous figure of 432,000 to 418,000 and a surprise rise from 69.3 to 71.6 in the Michigan Consumer Sentiment Index for November.

Sterling not only capitalised on the woes from Europe, but enjoyed a boost of its own from official data releases. Britain’s economy grew 0.8% in the third quarter of this year, boosted by net trade which made its biggest contribution to growth in two years. (Compared to the same period of 2009, the economy expanded by 2.8%, unchanged from a preliminary reading). Analysts had said that the pound would have been vulnerable had the figures been revised down. The initial reading was twice as much as had been expected and had contributed to a pullback in expectations for more monetary easing.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.

This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.

Share Prices Falling; Spain & Portugal To Hold Bond Auctions if Results are Poor

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.
Cash and income timing from a UK Pension or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension, QROPS and investment income taken.
Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, QROPS and now QNUPS (Qualifying non UK Pension schemes).

Despite confirming over the weekend that a rescue plan had finally been accepted by the Irish government, the euro underperformed the pound and US dollar throughout yesterday’s session as political worries now weighed on Ireland’s future and subsequently the euro zone.
The Irish government and EU officials met over the weekend and finally managed to persuade Ireland to accept the ECB’s offer of a bailout to prop up its struggling banking sector. In much the same way as Greece did earlier in the year, Ireland will accept a loan of approx. €90bn, leaving the UK with few options but to dig deep into its pocket to the tune of £7bn to help its biggest trading partner to recover.
Initially the news was well received with the euro strengthening to €1.1637 during Asian trading on Monday morning but just as quickly as gains came, political problems caused the euro to weaken and the pound hit a high of €1.1727 in late afternoon trade in London.
The Irish Government, like the UK’s is made up of a coalition, this coalition partner and the main opposition party feel the government is entirely to blame for the scenario and have called for a immediate general election. Irish MP’s have said they will not support the government’s drastic austerity plans into 2011 and on Monday evening received the news they wanted as Irish Prime Minister Brian Cowen announced he would be calling a general election in the second half of January.
The euro fell from a one week high against the US dollar of $1.3778 by 1.4% to finish the London session at $1.3588. A New York trader was quoted earlier in the afternoon saying, “A close in the euro below $1.3648 means it may depreciate to $1.3510 or to the November low of $1.3436 reached November 16th”
Also to add insult to injury, credit ratings agency Moody’s have said in a report that Ireland’s AA2 rating was already under review and now a multi notch downgrade was the most likely outcome.
Share prices fell as the markets were worried about whether or not the debt problems would spill over into the rest of Europe. Spain and Portugal will hold bond auctions this week and if the results are poor, there could be more bailouts in the near future. The Bank for International Settlements (BIS) estimated UK banks had up to £140bn exposure to Irish borrowers as recently as September so the bailout was welcomed by the UK.
This caused investors to abandon their risky asset positions in favour of safer bets and the US dollar rose against the pound as a result. The pound started the session at $1.6083 but during the day fell by roughly 1.1% to $1.5903.

Public Sector Net Borrowing Rises to £10.3bn, Retail sales could be benefitted says IHS Global

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.
Cash and income timing from a UK Pension or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension, QROPS and investment income taken.
Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, QROPS and now QNUPS (Qualifying non UK Pension schemes).

Public sector net borrowing in the UK for October rose to £10.3bn which was a record high for the month. Economists had expected public borrowing to fall andanalysts had forecasted a figure of £9.4bn. Despite the government increasing itsincome through taxes and reducing spending on jobless benefits as unemploymentfell.
Also out yesterday morning retail sales were up 0.5% from the previous month’s Year on year figure. They had shown a 0.1% decline the office for national statistics reported. Therise in October came after an expected fall in September which reported salesdropped a revised 0.5% Month on month and a revised figure of 0% Year on year.
IHS Global said, "It is likely that retail sales will benefit to a limited extent in the final weeks of this year from consumers looking to make purchases ofmore expensive items ahead of the January Value Added Tax increase. Retailers will also be fervently hoping that consumers decide to splash out and have a goodChristmas despite their worries and uncertainties over the economic outlook.”
Further out though, the concern remains that consumers will rein in their spending inthe face of serious headwinds. This would clearly limit overall economic growth.
This UK data did little to affect Sterling with GBP/EUR trading at 1.1702 andGBP/USD at 1.5962.
A report released yesterday in the US at 13:30 GMT by the department of labourshowed that the number of individuals claiming for initial jobless benefits rose lessthan expected at 439K analysts had expected claims to rise to 442K in the weekending November 13th.
Following the release of the data, the U.S. dollar was down against the euro, withEUR/USD jumping 0.84% to hit 1.3645.
Also in the US the Federal Reserve Bank of Philadelphia said that its manufacturingindex jumped to 22.0 in November, having previously risen to 1.0 in October.
Analysts had forecast the index to rise to 4.5 in November.
The dollar strengthened against Sterling gaining 0.52% trading at 1.5990 from1.6030, the pair’s highest since Tuesday.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.
This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.

Sterling falls Against Euro & Dollar “Nothing UK-specific” says Currency Strategist

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.

Cash and income timing from a UK Pension or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, QROPS and now QNUPS (Qualifying non UK Pension schemes).

Sterling fell against the euro on Friday as anticipation an aid package would be agreedfor Ireland helped strengthen the single currency. The plan will be put in place to help thecountry cope with the current situation of their banking system and we should heardetails of the package this week. Some expects have warned that a rescue may not beenough to prevent contagion in the single currency.

The pound also fell against the dollar after China raised banks’ reserve requirements,denting stocks and riskier currencies as concerns grew that tighter policy would dampenChinese growth.

"There is nothing UK-specific. Sterling had benefited with the euro from the increasedlikelihood of an Ireland bailout package, but we are seeing a little enthusiasm being lostand now the China move is the main driver," said currency strategist atBNP Paribas.

Against the dollar, sterling was down 0.5% at $1.5966, well below a high for theday of $1.6095.

Analysts said it could be significant that sterling closed the week below $1.60, making itdifficult for the currency to extend a recent rebound from a low of $1.5840 reached earlierthis week, its weakest since late October.

"There is some positioning unwinding that is weighing down on sterling," said FX strategist at Lloyds TSB. "We could see some choppiness heading into theU.S. Thanksgiving week and if a solution to Ireland is put in place next week then wecould see the euro and the pound bounce."

Against the dollar, technical analysts said sterling was supported around the $1.58region, given its 55-day moving average lay around $1.5825 on Friday, while the 50% retracement level of the pound's rally in September-November came in around$1.58.

The pound saw some support from Bank of England policymaker Paul Tucker who saidcentral banks must not dilute their commitment to price stability, although this was short-lived with the market's focus elsewhere.

Sterling has been supported since Wednesday's minutes from the Bank of England'slatest policy meeting suggested improving economic data and stubbornly high inflationwould keep quantitative easing off the agenda for now, with many investors not expectingto see any suggestion of it for the rest of this year.

It was also helped on Thursday by data showing a recovery in UK retail sales after twomonths of declines, although government borrowing hit another record high.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.

This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.

The Dynamics of Market & Currency Exchange Rates

We continue our daily look at factors affecting currencies allowing some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.

Investment market volatility and currency exchange remains a challenge. Things are still very volatile and we are in unique global influencing territory. In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions, QROPS and now QNUPS.

Wednesday saw the release of Novembers Bank of England’s minutes and as predicted policy makers left key interest rates at the historic low of 0.5% as was widely predicted. There was also no surprise at the decision to leave quantitative easing at the £200 billion mark. Seven members of the MPC including Mervyn King voted to keep interest rates and quantitative easing at the same levels. As usual Andrew Sentance voted to raise interest rates by 25 basis points and to maintain quantitative easing at the 200 billion mark. Adam Posen voted the opposite as Sentance by voting to maintain rates at the 0.5% mark but wanted an increase in the asset purchase programme.

Also released at 9.30 was UK unemployment, the data showed that those out of work had actually fell in October by 3,700 to 1.47 million. The reversed the 5,300 rise that was recorded in September. The overall picture remains one of a jobs recovery that is much more sluggish than after previous recessions analysis say.

These two pieces of data helped the pound climb to a day high of 1.5938 against the dollar before recovering to a level of around 1.5920 throughout the afternoon trading session. The pound was sold off heavily in late Tuesdays trading session so this data was seen as a welcome relief. The pound also made gains against the Euro hitting a session high of 1.1794 failing to break the 1.1800 level.

Later in the afternoon we saw the release of CPI inflation for October which showed consumer prices had edged up by 0.2%, which was below the 0.3% expected. This 0.2% rise was put down to growing cost of gasoline offset by flat or declining costs in other parts of the economy.

Elsewhere the euro remained under pressure as the debt concerns of Ireland continued to weigh heavily on the single currency. The euro held to a seven week low against the dollar before making a recovery later on in the afternoon. Dublin has yet to decide whether or not to accept a rescue package from the European Union but many investors said they believed it was only a matter of time before they succumbed to pressure from other euro zone members.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier’ climates. This with the re-assurance and security of UK authorised and regulated advice – essential tools for your security.

Euro Still Struggles While rise in US Treasury yields helps Dollar stay Strong.

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.

Cash and income timing from a UK Pension or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, QROPS and now QNUPS (Qualifying non UK Pension schemes).

The pound lost some ground against a generally strong dollar yesterday but closed in on seven week high against the euro. The euro came under pressure as last week’s problems with Ireland have spilled over to this week and Greece’s budget deficit was revised upwards.

Sterling slipped versus the greenback after data showed US retail sales climbed the most in seven months, exceeding forecast among economists. This adds weight to earlier data showing bigger than projected gains in payrolls and the ISM manufacturing purchasing managers index that suggest the US recovery picked up at the start of the fourth quarter.

The dollar was also helped by a sharp rise in US Treasury yields and a report that a group of prominent Republican-leaning economists was launching a campaign calling on the Federal Reserve to drop its quantitative easing plan. Sterling ended up 0.4% down on the day at $1.6070 having been as low as $1.6042 in the morning

The pound fared better against the euro gaining 0.4% during the day to hit a high of €1.1827. The euro struggled as Ireland’s banking system came under further scrutiny. A meeting in Brussels later today has been called to discuss Ireland’s reluctance to accept bail out from the EU. Last May a €750bn fund was set up to help struggling euro zone nations avoid the financial difficulties that struck Greece. Senior ECB officials are keen for Ireland to accept the bail out before the debt engulfs the whole euro zone economy

Greece was also in the headlines yesterday as its budget deficit was revised to 15.4% of gross domestic product from 13.6%, the nation’s debt was revised to 126.8% of GDP from 115.1%. Questions about the accuracy of Greek data have undermined the credibility of EU budget rules, which call for euro members to keep their shortfall at less than 3% of GDP.

The total budget gap for the 16-nation euro region widened to 6.3% in 2009, the largest in the shared currency’s history. The revisions also mean Greece won’t achieve the target agreed to pay back €110bn in emergency loans.

The euro fell 0.7% against the dollar during the session and dropped below $1.36 to finish the New York session at $1.3573, the lowest in over 6 weeks.

The outlook for the euro is fairly bleak at the moment, some traders believe it will fall to around $1.30 against the dollar and remain at least above the €1.18 mark against the pound. Key resistance levels are around the mid €1.18’s.