Pound Sterling – UK Markets

Sterling exchange rates came under continued selling pressure yesterday after weak retail sales reduced confidence in the pound. This morning sterling rose slightly against its European and Asian currency partners, trading at 1.62 against the US dollar and 1.13 against the euro.

Despite positive housing figures yesterday, the pound came under pressure from a report which showed business investment in the UK has fallen the most in 24 years. GDP figures released this morning have been revised upwards, showing that the UK economy contracted -0.7% in the second quarter, rather than the -0.8% previously recorded. This could help lift sterling today, while UK exchange rates will also likely be affected by consumer figures out in the US.

US Dollar – US Markets

Exchange rates for the US dollar are slightly lower this morning, losing ground against the pound, Australian and Canadian currencies. The greenback has climbed against the yen, euro and New Zealand dollar ahead of key consumer releases in the US today.

The core personal consumption index is due in the US today and this, along with personal income and expenditure for July will help provide an insight into consumer spending in the US economy. Consumer activity is crucial to economic recovery and the figures are expected to rise following the “cash for clunkers” initiative. The figures are due this afternoon.

Euro – European Markets

Euro currency rates have dipped slightly this morning, although the single currency remains at the top of recent ranges, particularly against the pound. The euro is currently trading at 1.43 against the US dollar and 0.87 against the pound.

The euro is heading for its second monthly gain on the US dollar, as euro sentiment has improved following the emergence of France and Germany from recession. German consumer confidence has leapt to a three-year high and European markets have gained this morning following positive results from Dell and higher metal prices. Economic and industrial confidence for the eurozone has exceeded market expectations this morning, while consumer confidence came in slightly lower than expected.

Other Currencies – Highlights

Currency exchange rates for the yen remain strong this morning, following news that Japan’s unemployment rate rose to 5.7%, ahead of the expected 5.4%. Consumer prices are also falling at record levels and as this comes on the eve of the general election, the news is a blow for incumbent prime minister Taro Aso.

Australian currency exchange rates are heading for the longest month of gains in over 20 years against the US dollar following a rally on the back of economic recovery. Record low interest rates and rising commodity prices have helped lead the Australian currency higher in recent months against the yen and US dollar. The New Zealand dollar is also on the verge of seven months worth of gains against the yen.

Pound Sterling – UK Markets

Sterling foreign exchange rates continued to slide against the euro yesterday, touching on an 11-day low of 1.1461 following strong European data. This morning the pound is weaker against its major currency partners, sinking to 1.63 against the US dollar and still trading around the 1.14 level against the euro.

Sterling sentiment is weak at present, particularly against the US dollar and euro following news that the eurozone is emerging from recession. The UK is expected to return to growth in the third quarter, with markets predicting a 0.5% expansion and this morning’s figures show UK mortgage approvals have improved for the seventh month in a row, climbing 7.4% in July. There is no UK data today with the Bank of England’s Charles Bean due to speak this afternoon.

US Dollar – US Markets

US foreign exchange rates are stronger this morning, gaining on all its major currency partners with the exception of the Japanese yen. The dollar has gained 0.3% on the pound and 0.14% on the euro to trade at 0.61 and 0.70 respectively.

US markets have opened optimistically following speculation that President Obama will reappoint Ben Bernanke as chairman of the Federal Reserve for a second term. Bernanke is highly regarded for his handling of the financial crisis and the news has led to gains for the greenback this morning. The US housing price index and consumer confidence figures are due today.

Euro – European Markets

Foreign exchange rates for the euro reached an 11-day high against the pound yesterday on the back of positive economic data. This morning the euro has dipped against the US dollar to 1.42, while gaining against the pound and Australian currency to 0.87 and 1.70 respectively.

The 3.1% rise in European industrial orders announced yesterday added to the growing evidence that the eurozone is emerging from recession. This supported euro foreign exchange rates, sending the euro to a multi day high against the pound. This morning’s figures show seasonally adjusted GDP expanded by 0.3% in the second quarter for Germany, while Swiss unemployment has climbed to 3.95 million. There is no further data today.

Other Currencies – Highlights

Australian foreign exchange rates rose to a 13-year high against the pound yesterday, as risk sentiment drove appetite for the higher yielding currencies. A weak pound also helped the Aussie to the 13-year high, and the New Zealand dollar also posted gains on the pound. This morning the Australasian currencies have trimmed gains after Chinese equity markets dipped overnight.

Israel’s central bank has voted to raise interest rates by 0.25%, becoming the first central bank to do so. This has prompted speculation that other central banks will soon follow suit, and the Israeli shekel has gained 0.35% on the pound.

Pound Sterling – UK Markets

Sterling exchange rates have recovered ground this morning, as positive UK retail sales figures have led the pound to reverse its losses yesterday following the MPC minutes. This morning the pound has strengthened to 1.65 against the US dollar and 1.16 against the euro.

UK retail sales rose 1.2% in June, on track for a 2.9% increase this year. B&Q, Next and Morrisons have all reported rising sales and healthy forecasts as the summer heat wave boosted spending. While these figures tend to support the view of recovery in the UK economy, retail sales are a volatile statistic GDP estimates due on Friday could provide a better indication. The CBI has reported that 250,000 jobs may be lost in the manufacturing sector as factory orders fell to new lows in July. There is no further data in the UK today with a GDP estimate out tomorrow.

US Dollar – US Markets

US dollar exchange rates have dipped this morning as markets digest Bernanke’s speech and recover a little appetite for risk. The greenback has gained 0.76% against the yen and weakened against the pound and euro, currently trading at 0.6047 and 0.7025.

US markets had a relatively quiet day yesterday with the S&P finishing marginally down despite gains in European equities. The US dollar continued to be supported by risk trading as corporate earnings at Morgan Stanley came in worse than expected, sending the dollar higher against its international currency partners. Home sales and jobless claims are out in the US today and this will likely affect the US dollar exchange rate and risk appetite in the market.

Euro – European Markets

European exchange rates are holding firm this morning, trading at 1.42 against the US dollar and 0.86 against the pound. The euro has sunk against the Australian and New Zealand dollars as investors are prepared to take on limited risk.

The European current account deficit has narrowed to EUR1.2 billion in May, its smallest level in over one year. This is much less than the market expectation of a EUR5.8 billion deficit. Second quarter profits at Credit Suisse, Switzerland’s largest bank, have risen 29% as profits from trading and investments rose. The news sent shares in the bank 3.8% higher and has supported the euro this morning. Today is light for euro data with the PMI for manufacturing and services due tomorrow.

Other Currencies – Highlights

The New Zealand dollar inched closer to a nine-month high against the US dollar yesterday as rises in Asian stock markets boosted New Zealand dollar exchange rates. The Australian dollar also rose to a one-month high against the greenback, gaining to 81.89 US cents.

The Brazilian central bank has lowered interest rates by 0.5% to 8.75%, a new record low in the hope of stimulating the Brazilian economy. Domestic demand is still driving growth in Brazilian, with 4% expansion expected this year. Inflation is currently running near government targets of 4.5%, leading economists to speculate that interest rates could stay on hold at this level for sometime.

Pound Sterling – UK Markets

Sterling currency exchange rates have recovered this morning, boosted by falling inflation rates in the UK. After touching on a five-week low against the euro and falling to 1.60 against the US dollar yesterday, the pound is currently trading at 1.16 and 1.63 against the euro and dollar respectively.

Consumer prices in the UK have risen 0.3% on the month to June yet the annual inflation rate has fallen to 1.8%. This is the first time in 21 months inflation has fallen below the Bank of England’s 2% target. The retail price index also rose by 0.3% in June and has fallen by -1.6% annually, dragged lower by a reduction in mortgage approvals. These figures could be interpreted positively by markets as an indication that inflation is levelling off. The DCLG house price index has fallen by -12.5% on the year, better than market expectations and inline with observations that the property market could be bottoming out. Tomorrow, average earnings and the unemployment rate are due in the UK.

US Dollar – US Markets

The greenback has lost ground this morning with currency exchange rates declining on the back of positive market data in the UK. The dollar has gained against the yen, Brazilian real and Swiss franc however, as investors diversify from the traditional safe havens.

US equity market staged a minor rally yesterday as a report suggested corporate earnings at Goldman Sachs could rise as much as 15% The S&P closed the day 2.5% up and the boost allowed sterling exchange rates to recover against the dollar. This rally however was complicated by the fact that Larry Summers, an economic advisor to the White House, commented that we may not have seen the bottom for GDP yet and underlying trends remain uneasy. US retail sales and the producer price index will be the focus of foreign exchange markets later in the day.

Euro – European Markets

Euro currency exchange rates are weaker this morning, sinking on the back of downbeat industrial production figures and increased risk appetite. After surging to a five-week high yesterday, the euro has lost 0.5% to the pound while posting gains on the yen, US dollar and Swiss franc.

Eurozone industrial production has fallen 0.5% in May, with the annual rate of decline running at -17%. This is a slight recovery from the -21.6% decline predicted the previous month but is still a massive knock to confidence in the euro. The EUR/USD currency exchange rate has found support at 1.39 after being rejected at 1.40 yesterday. Also this morning the German ZEW economic survey has fallen to -39.5 in July, in contrast to market expectations. As the largest economy in the region, confidence in the German economy is crucial and these figures are likely to affect euro sentiment throughout the day.

Other Currencies – Highlights

Hungarian inflation rates have also unexpectedly slowed in June, falling to 3.7% from 3.8% the previous month. This increases chances of an interest rate cut for Hungary as stable inflation and a less volatile currency are improving investor confidence in the forint. Currency exchange rates for the Hungarian forint have risen to 275.79 per euro this morning. After declining 16% against the euro in the last year, the forint has recovered 5% in the last three months.

Japanese stocks rose overnight, led higher by the US market rally and the expectation of positive corporate earning figures. The yen has lost ground as global confidence rises and markets await results of the Japanese election and Bank of Japan interest rate decision.

Pound Sterling – UK Markets

Sterling currency rates have recovered slightly this morning ahead of the Bank of England interest rate decision. The pound has gained against the US dollar and Japanese yen, and is unchanged against the euro, currently trading at 1.15.

Today the MPC voted to keep interest rates on hold at 0.5% and maintain current levels of quantitative easing at GBP125 billion, despite the dire production and GDP figures released in the last week. Bank of England governor King has announced that economic recovery is expected to be a “long hard slog” and more action could be needed to kick-start a sustainable recovery in the UK. This morning’s figures show the UK trade deficit has narrowed to GBP-6.3 billion, the lowest level since June 2006. The interest rate decision is due at noon.

US Dollar – US Markets

US currency rates are mixed this morning as the dollar has gained against its Asian currency partners but weakened against the European currencies. In early trading this morning the dollar lost half a percent against the pound and euro, currently trading at 0.61 and 0.71 respectively.

The IMF released updated forecasts yesterday, revising global growth down to -1.4% this year, with a 2.5% expansion predicted in 2010. The report also announced that recovery in the G8 nations could be quicker than expected and the priority for governments should be devising an exit strategy from stimulus packages, while maintaining low inflation and steady growth. However the largely positive report failed to trigger gains in currency exchange rates, as markets were more interested in the results of the G8 summit. Jobless claims figures are out in the US today.

Euro – European Markets

Currency rates for the euro have strengthened this morning against its international currency partners, gaining 0.5% on the dollar and 0.9% on the yen due to increased risk appetite in the market. The euro is currently valued at 0.86 versus the pound and remains just below the 1.4 level against the US dollar.

The German consumer price index has risen 0.4% on the month for June, completing a surprisingly optimistic picture of the German economy this week. As the largest in the eurozone, a recovery in the German trade and export sector could be instrumental in helping to lift the rest of the euro economy out of recession. The G8 summit continues in Italy today, with economy top of the international agenda and the ECB monthly report is also due today.

Other Currencies – Highlights

Aussie and Kiwi currency rates rose against the euro and pound this morning, boosted by market optimism and the UK interest rate decision. Australian unemployment levels rose in June to 5.8%, a drastic rise from last year’s low of 3.9%. However this failed to disrupt Aussie currency rates too much, as the 21,000 jobs lost was largely in line with market expectations.

Central banks in Chile and Peru are set to cut interest rates today, after annual inflation figures in Chile fell below government targets. Chile has already reduced the base interest rate by 7.5% this year, more than any other central bank as the economy suffers due to declining export prices and reduced consumer demand. Economists are also predicting Peru will reduce its base interest rate to 2.5% for the sixth consecutive month following the affects of recession on the economy.

Pound Sterling – UK Markets

Sterling exchange rates hit a one-month low against the euro yesterday, the third consecutive day of losses as the pound was put on the back foot from weak industrial production and manufacturing data. This morning the pound has declined to 1.6 against the US dollar and 1.15 against the euro, sliding ahead of the interest rate decision tomorrow.

The first round of second quarter GDP predictions has arrived with the NISER predicting the economy will shrink by -0.4%. Halifax house pricing figures released this morning show that prices have declined -15% on the year, with a -0.5 decline in June partially reversing the 2.6% rise in May. Weak UK data is leading to speculation that the Bank of England will add to its quantitative easing programme and this has reduced support for the pound. Today is light for UK data with sterling exchange rates likely to be affected by trade balance and GDP figures out tomorrow.

US Dollar – US Markets

US dollar exchange rates have climbed this morning, continuing gains from recent days on the back of market risk aversion. The dollar is currently valued at 0.71 versus the euro and 0.62 versus the pound.

The G8 summit kicks off today although with Chinese President Hu Jintao delayed, debate over the status of the USD as the premier reserve currency is likely to be put on hold. Recent uncertainty in the market has led investors to flock to the safe haven dollar in droves, quelling doubts over the position of the dollar as reserve for the moment. The Japanese yen has also risen to six-week highs against the euro and pound on the back of uncertainty. Today in the US MBA mortgage application figures are released with jobless claims figures out tomorrow.

Euro – European Markets

Euro exchange rates reached a one-month high against the pound yesterday, boosted by bullish German data and weak figures from the UK. This morning the euro has continued to gain, currently trading at 0.86 versus the pound and 1.39 against the US dollar.

Euro exchange rates received a boost yesterday from German factory orders which unexpectedly jumped to 4.4%. This is in contrast to industrial production figures in the UK, where markets expected a 0.2% rise but in fact got a -0.5% contraction. This morning first quarter GDP figures for the eurozone show the economy contracted -2.5% in the first quarter, in line with market expectations. German industrial production figures are also due this morning and this is likely to provide further insight into how the eurozone economy is faring.

Other Currencies – Highlights

Australian dollar exchange rates reached a three-week high against the pound yesterday as weak figures in the UK and the RBA interest rate decision renewed optimism in the Australian economy. Consumer confidence in Australia also surged by 9% in July and new mortgage lending rose by 2.2%. However despite the positive data, the pound eventually trimmed losses to close the day up against the Aussie dollar following news that Asian economies face a steep climb out of recession. Internationally, appetite for risk is low and this is putting pressure on exchange rates for the Aussie and Kiwi dollar.

Pound Sterling – UK markets

UK foreign exchange rates have declined from the seven-month high against the dollar and five-month high against the euro earlier this week on the back of political uncertainty in the UK. Despite positive economic figures, news that the Labour government is facing MP resignations dragged the pound down to 1.60 against the dollar and 1.13 against the euro. UK foreign exchange rates have also declined against a basket of international currency partners.

The UK producer price index out this morning has hit a multi-year low, largely on the back of falling oil prices. Yesterday, the Bank of England voted to keep interest rates on hold at 0.5% and maintain current levels of quantitative easing. This led to investor optimism that the MPC plan to stimulate the economy may be working. However despite the positive news, the fragile political situation has been negative for sterling exchange rates. Today, foreign exchange markets in the UK are likely to be affected by US employment data and political news from the government.

US Dollar – US Markets

Results are mixed for the US dollar this morning as foreign exchange rates have been volatile in the run up to the release of US employment data. The dollar has declined against the pound and euro this morning, but has gained against the yen, Canadian dollar and South African rand.

Employment data released in the US today is likely to be the major influence on foreign exchange rates internationally as the labour market is central to global recovery. The current market consensus is for a 0.3% rise in the US unemployment rate to 9.1%. Yesterday the US currency dipped in response to concern over the dollar’s status as an international reserve  although this ground has been recovered this morning. Average hourly earnings, the non-farm payroll and official unemployment rate are released today.

Euro – European Markets

Foreign exchange rates for the eurozone have improved this morning with the euro currently trading above 1.4 against the US dollar and 0.88 against the pound. The euro has also gained against the yen and Canadian dollar while losing ground to the Aussie and Kiwi currencies.

The ECB left interest rates unchanged at 1% yesterday and President Trichet commented that they may remain on hold for some time, as the euro economy is expected to begin a gradual recovery in 2010. With the eurozone expected to experience a greater downturn than the UK, euro foreign exchange rates may be slightly bearish versus the pound in the short term. There is no data due in the eurozone today.

Other Currencies – Highlights

The Australian and New Zealand dollars rose for the third consecutive week against the yen as investors favoured the higher yields based on speculation that the global recession is abating. An interest rate decision from the Reserve Bank of New Zealand is due next week and the NZD could experience some volatility in the run up to this. In the meantime, global foreign exchange trends based on US employment data are likely to affect foreign exchange rates for the Kiwi and Aussie currencies.

Pound Sterling – UK markets

The sterling currency rate weakened against the euro on Friday, closing the day at 1.14. In early trading this morning, the pound has risen to 1.15 against the euro and 1.64 against the US dollar. This is the highest level in 2009 for sterling, fuelled by the improvement in global confidence.

Sterling currency rates have climbed across the board this morning, with the pound reaching some of the best currency rates in 2009 against its major currency partners. This positive sentiment is based on the view that decline in the UK economy may be nearing a bottom. The UK PMI for manufacturing released this morning shows an improvement to 45.4, climbing from 43.1 towards 50 which indicates a positive result. The Bank of England’s MPC will meet later this week for an interest rate decision. With rates currently at a record low of 0.5%, no change is expected and any further activity is expected to be based on quantitative easing.

US Dollar – US Markets

The dollar has declined against most of its international currency partners this morning, trading over 1.3% lower against the pound and 0.6% lower against the euro. US currency rates have also sunk over 1.4% against the Australian and New Zealand dollars.

Currency trends for the US dollar are bearish at present and are expected to remain so over the coming month. Weakness in the auto sector is weighing on dollar sentiment and levels of QE in the US are keeping investors uncertain. General Motors, once a symbol of American consumerism and the world’s biggest company, is to declare bankruptcy later in the day. GM is one of the most high profile casualties of the credit crunch and is expected to undergo a short “surgical” bankruptcy with a new “leaner” company to be launched in 60 days. Personal income and consumption figures are due in the US today and these often provide a degree of market volatility as they are closely related to retail sales and consumer confidence.

Euro – European Markets

The euro has also benefitted from a rise in risk appetite internationally, gaining over 0.5% on the dollar to trade at some of the best currency rates this year. The euro is currently valued at 1.42 against the greenback, 0.86 against the pound and 134 against the yen.

After touching on the best currency rates in 2009 against the US dollar on Friday, the euro has continued to gain this morning on the back of improved risk appetite. This is despite the bankruptcy of General Motors which is expected to cost up to 20,000 European jobs. The PMI for manufacturing in both Germany and the eurozone have continued to climb this month, showing a modest improvement in the European manufacturing sector. The EMU unemployment rate is released tomorrow.

Other Currencies – Highlights

The Australian dollar has surged against the pound and US dollar overnight as improved risk appetite and commodity prices support currency rates for the higher yielding currencies. Numbers of new building permits and the RBA interest rate decision for June are due overnight and this could induce some currency volatility for the Aussie dollar.

The Canadian dollar has also gained overnight on the back of more positive market sentiment, climbing nearly one percent on the US currency. Figures released in China overnight indicated a modest expansion in manufacturing activity and this has boosted market sentiment in North America. Canadian GDP figures and industrial product prices are due this afternoon.

Pound Sterling – UK markets

A bank holiday in the UK yesterday saw sterling currency rates weaken against the euro. This morning the pound has recovered these gains, currently trading at 1.13 on the euro and 1.58 against the US dollar.

Last week’s figures showed the UK economy contracted an unrevised 1.9% in the first quarter of 2009. This is largely due to a 5.9% drop in exports leading to significant contraction in the industrial production sector. Also last week the Standard and Poor’s downgraded the UK sovereign credit rating based on the level of government debt as a proportion of GDP. These factors are responsible for the weak trend in Sterling at present as investors worry over government debt levels worldwide. This morning Virgin Atlantic announced it has doubled annual profits, despite rising oil prices and the recession. This is in contrast to British Airways who announced a GBP401 million pre-tax loss for the last year. There are no major announcements in the UK today.

US Dollar – US Markets

With US markets also closed for a public holiday yesterday the dollar lost ground against the euro overnight. This morning this has been recovered as US currency rates have climbed to 0.63 against the pound and 0.71 against the euro.

At present the underlying trend in US markets is negative as investors worry over government debt levels. While recent weeks have brought investors optimism based on recovery prospects, leading to gains in equities and currency exchange rates, the current focus on government debt levels is creating a sense of underlying nervousness in the market. With the Standard and Poor’s last week downgrading the UK credit rating, other countries have now come under the international spotlight. The US budged deficit is also sizeable and this is affecting dollar sentiment. Consumer confidence figures are out in the US today.

Euro – European Markets

With US and UK markets closed for a bank holiday yesterday the euro advanced on both currencies. This morning, these gains have been trimmed as the pound and dollar recover against the single currency. At present, euro currency rates are weaker against the Australian and New Zealand dollar and little changed against the yen and US dollar.

European equities opened on a weak note this morning amid concerns over the North Korean missile tests and debt amongst European banking institutions. Export levels in Germany plunged 9.7% in the first quarter and the economy as a whole contracted 3.8%. Figures released this morning show new industrial orders for the European Monetary Union have fallen by -26.9%. Although significant, this is an improvement on the last quarter and shows the pace of decline is easing. The German consumer price index is out tomorrow.

Other Currencies – Highlights

South Africa’s economy contracted by -6.4% in the first quarter, sending the entire economy into recession as mining and construction were scaled back due to the global recession. This follows a -1.8% contraction in the fourth quarter of 2008, reflecting a sharp downturn in economic activity. This news snapped a decade of growth for South Africa and weeks of gains for the rand, which weakened on the back of the negative figures.

The New Zealand dollar is likely to experience some volatility this week with the release of the annual budget. This could impact on credit ratings also which seem to be in the international spotlight at present.

Pound Sterling – UK Markets

The pound is trading above 1.54 against the dollar this morning, its highest level in 2009 against the greenback. The pound has also climbed above 1.13 on the euro and is up nearly 1% on the yen as improved risk appetite has stimulated demand for the UK currency.

Sterling exchange rates have improved on the back of global recovery prospects, more positive economic data over the last few months has seen investors begin to diversify their foreign currency reserves leading to improved exchange rates for the pound and euro in particular. Throughout the second half of the year as evidence of recovery begins to emerge, we could see more scope for sterling strength against the yen and US dollar. This morning the UK consumer price index has risen by 0.2% for April, climbing 2.3% on the year while the retail price index has also climbed in April, by 0.1%. Profits at retail giant have declined by GBP400 million and the company has slashed its shareholder dividend by one third. UK retail sales figures are due later in the week with the Bank of England minutes out tomorrow.

US Dollar – US Markets

The dollar has weakened against the pound and euro overnight and is trading at lower levels against a basket of international currency partners this morning as improved economic data supports the view that the global economy is stabilizing.

A speech from Treasury secretary Geithner in which he commented that the US economy had stabilised prompted a rally in equity markets yesterday. This boosted currency exchange rates for the higher yielding currencies at the expense of the safe haven dollar and yen. This morning, news that Goldman Sachs, Morgan Stanley and JP Morgan Chase & Co. are planning a USD45 billion refund to the government has added to the view that the banking sector is beginning to recover. US housing starts are due out today and are expected to show an improvement in April as the slump in house prices is beginning to generate buyer interest. Minutes from the FOMC meeting are released tomorrow.

Euro – European Markets

The euro has climbed back to 1.36 against the US dollar and gained against the Japanese yen this morning as improved confidence aids the distribution of funds outside the safe havens. The euro is trading lower against the pound, Australian, New Zealand and Canadian dollars as well as the South African rand.

Yesterday the eurozone posted an unexpected trade surplus in March with seasonally adjusted figures showing exports strengthened by 1.6% in February. Imports increased by 0.4%. While this data shows a significant contraction for trade on the year, it also shows trade is beginning to recover after the eurozone slipped into recession in mid-2008. The euro has also rebounded ahead of the German ZEW economic survey out this morning which is expected to show an improvement in business confidence in Germany.

Other Currencies – Highlights

The New Zealand dollar remains weak this morning as official statistics show the service sector PMI fell from 47.1 to 43.7. Asian equities advanced overnight as a strong Wall Street session yesterday translated into gains for many of the Asian currencies. The euro, pound and US dollar have all gained ground against the yen and the Nikkei index climbed by over 2% yesterday. The Indian rupee has gained another 50 paise against the US dollar to trade at 47.6 this morning as the election of Manmohan Singh’s Congress Party has increased optimism over future economic reforms.

Glenn Stevens, governor of the Reserve Bank of Australia, has claimed the Australian economy will be supported by interest rate cuts and commodity demand from China. The Australian dollar climbed to its highest level in a week against the US dollar, boosting the New Zealand dollar along with it. The Reserve Bank of Australia has predicted the Australian economy is well placed to weather the recession due to its strong commodity orientation and effective economic policy. Consumer confidence and wage price figures are due in Australia tomorrow.