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Revised second quarter GDP figures show the UK economy contracted -0.7% in the second quarter, slightly less than the -0.8% previously recorded. Economic and industrial confidence for the eurozone has come in positive this morning, while US personal consumption figures are likely to cause some currency volatility later in the day.

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.

The single currency has extended its rally against the pound this morning, gaining support from the release of the German consumer price index and consumer confidence figures. International risk appetite took a hit yesterday as US durable goods orders came in more modest than expected, and currency exchange rates for the yen strengthened in the run up to Japan’s general election.

Pound Sterling – UK Markets

Sterling currency exchange rates continue to fall this morning despite positive housing figures from Nationwide, with the pound falling against its major currency partners. Sterling is currently valued at 1.62 against the US dollar and 1.13 against the euro.

Further losses for the pound yesterday put sterling’s decline as the longest since January against the single currency. The price of UK bonds fell to a record low and the German IFO business climate improved, pushing the euro even higher against sterling. A correction is expected for the pound at some stage, though when this will occur is difficult to say. Nationwide figures show UK house prices gained 1.6% in August, climbing for the fourth consecutive month, while total business investment is down -10% for the second quarter.

US Dollar – US Markets

US currency exchange rates gained over 1% against the pound yesterday after downbeat US figures limited risk appetite. This morning the US dollar is trading at 0.70 against the euro and 0.61 against the pound, while climbing against its European currency partners.

Markets were underwhelmed yesterday by durable goods orders in the US, which rose 4.9% in July, slightly lower than market expectations. However these figures support the idea that the US is recovering across a wide range of sectors and economists are predicting the world’s largest economy will return to growth in the third quarter. GDP figures for the second quarter and initial jobless claims will be a source of currency volatility today.

Euro – European Markets

Currency exchange rates for the euro remain bullish, with the single currency posting its longest rally against the pound since January. The euro has climbed to 0.87 against the pound and dipped slightly to 1.42 against the US dollar.

German data continues to exceed market expectations with the consumer price index rising 0.3% in August. Positive IFO figures triggered a euro rally yesterday and economists are expecting the German economy to support sustained growth by mid 2010. German consumer confidence this morning rose to a 15-month high and EMU consumer, economic and industrial confidence figures are due tomorrow.

Other Currencies – Highlights

A rise in risk aversion following modest US data limited currency exchange rates for the Australian dollar yesterday, sending the Aussie lower against its major currency partners. A 3.3% rise in Australian business investment in the second quarter has added to the view that Australia is recovering, though the Australian and New Zealand currencies remains particularly susceptible to global risk appetite.

Currency exchange rates for the Japanese yen have climbed this morning, due to increased demand for the safe haven while risk appetite remains weak. Unemployment has risen to 5.5% Japan, while consumer prices are declining and export levels have fallen for ten consecutive months. The Japanese election is due soon and the yen could remain strong in the run up to this.

This morning’s figures show the German business climate and expectations rose in August, sparking further gains for the euro which has strengthened against its major currency partners. Sterling sentiment remains weak, putting pressure on currency rates for the pound, while Japanese export levels have fallen for the tenth straight month.

Pound Sterling – UK Markets

Sterling currency rates touched on a 10-week low against the single currency yesterday, falling to 1.1410 in the midst of weak market sentiment. This morning the pound continues to fall, trading at 1.13 against the euro and 1.63 against the US dollar.

Sterling sentiment remains extremely weak at present, due to the absence of positive UK data and growing levels of government debt. The rise in German business confidence has led to increased pressure on the pound, though economists are speculating this could be positive for sterling as a euro recovery, combined with weak exchange rates will help stimulate UK exports. The next two days are light for UK data with GDP figures released on Friday.

US Dollar – US Markets

The US dollar rose for the fifth consecutive day against the pound, as markets responded favourably to the news that Ben Bernanke would be appointed a second term as Fed chairman. This morning US currency rates are valued at 0.69 versus euro and 0.61 against the pound, while declining against the yen, Australian and New Zealand dollars.

US consumer confidence figures released yesterday show confidence rose for the first time in three months, reaching 54.1 and topping the 50 mark which separates negative from positive data. House prices however, continued to decline, falling 6.1% in the second quarter despite a 0.5% rise in the month to July. Today new home sales figures and durable goods orders will be of interest to US markets.

Euro – European Markets

Euro currency rates have continued to rally this morning, gaining a further 0.3% on the pound and 0.15% on the US dollar. The single currency has also gained against its Asian and European currency partners, touching on 0.84 against the pound and 1.43 against the US dollar.

The German IFO business climate survey has risen to 90.5 in August, while expectations have also risen to 95. The German import price index came in at -0.9% on the month but overall, the euro is stronger due to dramatically improved sentiment in the eurozone. There is no further data in the eurozone today, with economic, consumer and industrial confidence released later in the week.

Other Currencies – Highlights

In Japan export levels have declined in July, falling for the tenth straight month sparking fears that the effects of global stimulus packages may be beginning to wane. Export levels fell 37.5% in July, more than the 36.5% recorded in June. Currency rates for the yen have climbed against the pound, euro and US dollar this morning.

Annual inflation rates in Brazil have slowed for the third consecutive month, prompting speculation that the central bank will keep interest rates low until mid 2010. Currency rates for the Brazilian real fell 1% against the US dollar following the news, and are currently trading at 1.86 per US dollar.

Foreign exchange rates for the pound remain bearish, sinking to an 11-day low against the single currency yesterday following strong industrial orders in the eurozone. US markets are optimistic this morning amid speculation that Ben Bernanke will be reappointed for a second term, while Israel’s central bank has voted to increase interest rates by 0.25%.

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.

An index measuring confidence among business professionals in the UK has risen the most in over two years, as speculation grows that the UK will end its recession in the third quarter. News that Thailand has emerged from recession and improved sentiment from Ben Bernanke led to gains in Asian trading overnight, with yen and US dollar foreign exchange rates falling as demand for the safe havens diminishes.

Pound Sterling – UK Markets

Sterling foreign exchange rates are relatively unchanged this morning, slightly down against the US, Australian and Canadian currencies, while recovering some of the ground against the euro lost on Friday. Sterling is currently trading at USD1.64 and EUR1.15.

The Institute of Chartered Accountants has seen confidence among business professionals rise by the largest amount in two years, as the UK is expected to return to growth in the third quarter. The index leapt from -28.2 at the end of March to 4.8 at the end of June. The London FTSE has gained ground following the news. This week is light for UK data, with nationwide house prices released tomorrow.

US Dollar – US Markets

US foreign exchange rates are slightly higher this morning against the yen, euro and pound while declining against its Asian currency partners. The dollar is currently valued at EUR0.69 and GBP0.60.

Comments from Ben Bernanke that growth prospects for the US economy “appear good” helped fuel a rise in risk appetite overnight with Asian markets gaining ground. The pound reached an 11-day high against the dollar last week after US house prices continued to rise for the fifth consecutive month. This week brings more housing data in the US, along with consumer confidence and durable goods orders.

Euro – European Markets

Euro foreign exchange rates are slightly weaker this morning, losing ground against all its major currency partners with the exception of the pound, Swiss franc, yen and South Korean won. The single currency is currently trading at USD1.42 and GBP0.86.

The euro continued is rally in Friday’s trading following news that business expectations in Germany and France rose to their highest level in over two years, supporting the view that their economies are recovering. This morning industrial new orders in the eurozone rose 3.1% in June, while still declining at an annual rate of -25.1%. There is no major data in the eurozone today.

Other Currencies – Highlights

In Asian markets Thailand is the latest country to join the growing list of those emerging from recession. In combination with improved confidence from Ben Bernanke, this has fuelled gains in Asian stock markets this morning, where markets from Hong Kong to South Korea have gained ground.

The Japanese yen has weakened against the euro for the third consecutive day, as growing optimism is capping demand for the safe haven currencies. The yen also declined the most against the Australian and South Korean currencies, and is currently valued at 135.63 per euro.

The pound remains weak this morning as markets digest news of a record budget deficit in the UK. The euro continues to rally following positive PMIs for the manufacturing and service sectors and the Canadian dollar was boosted yesterday by a recommendation to buy from Goldman Sachs.

Pound Sterling – UK Markets

Sterling foreign exchange rates have declined this morning as markets digest the record budget deficit announced yesterday. The pound has declined against its major currency partners, with the exception of the Australian and New Zealand currencies.

New that the UK is running a record budget deficit kept sterling under pressure yesterday, with the pound remaining in low ranges against the euro and US dollar. Rising government debt may have contributed to the MPC decision to increase QE levels by another GBP50 billion and rising retail sales did little to boost investor sentiment. There is no major data in the UK today.

US Dollar – US Markets

US dollar foreign exchange rates received a boost yesterday after negative jobless figures triggered a spike in risk aversion. This morning the US dollar is trading at 0.69 against the euro and 0.60 against the pound.

New jobless claims rose by 576,000 in the week to August 15, more than markets expected which led to a bout of risk aversion yesterday. US dollar gains were trimmed however by the Philadelphia Fed which showed manufacturing in the region expanded for the first time in over a year. This is an important snapshot of the region as a whole. US existing home sales are out this afternoon.

Euro – European Markets

Foreign exchange rates for the euro remain strong this morning, climbing against its major currency partners with the exception of the yen and Swiss franc. The euro is currently valued at 1.42 against the US dollar and 0.86 against the pound.

German PMIs for both manufacturing and services have shown positive results this morning, coming in at 49 and 54 respectively. This is in line with positive German data released earlier in the week, indicating that the eurozone’s largest economy is on the way to economic recovery. PMI’s for the eurozone are slightly worse, coming in just under the 50 mark. There is no further data in the eurozone today.

Other Currencies – Highlights

Foreign exchange rates for the Australian dollar gained nearly a cent against the pound yesterday, after the UK budget deficit came in at a record figure. News that the Philadelphia Fed has expanded helped raise foreign exchange rates for the Aussie and Kiwi currencies, through boosting international risk appetite.

The Canadian dollar has also received a boost after wholesale sales rose 0.6% in June, the first increase in 9 months. Goldman Sachs also recommended buying Canadian dollars against the US in the short term which sent the CAD to a weekly high against the greenback.

Sterling currency rates remain neutral this morning after the UK posted a record budget deficit in July, the lowest since 1993. UK retail sales also reported a modest rise, climbing 0.4% on the month. Today is light for economic data in the UK and eurozone, with the US leading index set to affect international currency rates.

Pound Sterling – UK Markets

The trend in sterling currency rates remains neutral this morning with the pound trading at 1.65 against the US dollar and 1.16 against the euro. The pound has also gained 0.3% against the yen and is up slightly against the Canadian dollar.

Sterling lost nearly a cent against the euro yesterday after the MPC minutes showed the Bank of England was split on its quantitative easing policy. CBI distributive trades also came in slightly worse than expected at -54. This morning’s figures show retail sales rose 0.4% last month and 3.3% on the year, while public sector borrowing is running at GBP8 billion. The US leading index could be a source of volatility for the pound later in the day.

US Dollar – US Markets

Currency rates for the US dollar are mixed this morning as the greenback climbed against the yen and pound while declining against the euro and Asian currency partners. The US dollar is currently trading at 0.70 versus the euro and 0.60 versus the pound.

The US leading index is released today and positive figures are expected to show the recession is drawing to a close. Recent figures show evidence of stock building, higher export levels and fewer job losses, though economists are quick to point out that there remain a number of large barriers to sustainable recovery, most notably unemployment which is set to reach 10%. The Philadelphia Fed is also released today and this will provide and important snapshot of the manufacturing industry.

Euro – European Markets

Euro currency rates rose this morning after a volatile day in equity markets yesterday. This morning the single currency is marginally higher against the pound, US dollar, Canadian dollar while declining against the Australian and New Zealand currencies.

European stocks have recovered this morning which could boost euro sentiment today. The ZEW survey for Switzerland came in better than expected at 18.6, and the trade surplus rose to CHF2.5billion. There is little data out in the eurozone today, with euro currency rates likely to be affected by the US leading index released this afternoon.

Other Currencies – Highlights

Currency rates for the Japanese yen fell against the euro and dollar overnight as a rebound in Chinese stocks improved risk appetite. The South African rand and South Korean won gained the most against the yen as higher yielding currencies rallied, boosted by optimism over global recovery.

Australian and New Zealand currency rates are lower this morning against the pound and US dollar, despite rebounding stocks in China. The Australian central bank has made a record AUD sale based on the view that foreign exchange markets are stabilising. The AUD has gained 18% against the US dollar and is currently trading at 1.20 per US dollar.

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Strong corporate earnings figures in the US and positive Chinese economic data supported risk and equity markets yesterday, sending currency exchange rates across Europe and Asia higher. The figures boosted market sentiment across the board and led to a US dollar selling session with exchange rates improving for the Pound, Australian and New Zealand dollars.

Pound Sterling – UK Markets

Sterling exchange rates are in familiar territory against its international currency partners this morning, trading at 1.63 against the dollar and 1.16 against the euro. The pound has also gained over 0.3% against the Australian, New Zealand and Canadian dollars on the back of improved risk appetite.

The rising UK unemployment rate put sterling under pressure yesterday as official figures showed unemployment had reached the highest level in 12 years. However the pound was able to trim losses with strong US corporate earning figures and GDP in China boosting appetite for risk in the market. There is no major data in the UK today, with sterling exchange rates likely to be affected by the results of the Philadelphia Fed released this afternoon.

US Dollar – US Markets

Exchange rates for the US dollar slid yesterday as strong corporate earning figures buoyed market sentiment and increased risk appetite. The dollar lost ground against the yen, pound and euro, although has pared losses this morning to currently trade at 0.71 versus the euro and 0.61 against the pound.

Minutes from the FOMC meeting released yesterday noted that any further funds from the Federal Reserve would depend on “the Committee’s evolving expectations for the economy”. The Fed have increased their economic outlook, revising growth figures upwards, but the rising balance sheet is an immediate concern. Strong corporate earnings from Intel and Goldman Sachs triggered a dollar sell off yesterday and the Philadelphia Fed manufacturing survey is due in the US today.

Euro – European Markets

The euro exchange rate climbed 1% against the US dollar yesterday, touching on 1.41 on the back of rising market confidence. The euro has since dropped back against the dollar, currently trading at 0.85 versus the pound and 1.40 versus the dollar.

European indices surged ahead yesterday, with French, German and UK stock markets all gaining over 2% following positive figures in the US and China. Consumer prices have declined in France for the second month in a row, falling 0.6% from a year ago due to lower energy prices. There is no data due in the eurozone today with construction output and the trade balance released tomorrow.

Other Currencies – Highlights

Overnight figures from China show annual GDP growth of 7.9% and industrial production growing 10.7% in the past year, supporting this GDP growth. Inflation rates are falling in China, declining 1.7% on the year, with annual retail sales down to 15% growth, falling from a peak of 23% last year. Overall the Chinese economy remains strong and this led to a wave of optimism in global markets yesterday, sending exchange rates higher for the higher yielding currencies.

Consumer inflation in New Zealand rose by 0.6% in quarter 2, slightly higher than the 0.4% forecast by the Reserve Bank. The New Zealand dollar gained over 2 cents against the pound yesterday on the back of strong profits from Intel and Goldman Sachs and has continued to gain this morning, currently trading at 2.55 to the pound.

The annual rate of inflation in the UK has fallen below the Bank of England’s 2% target for the first time in 21 months. Today’s calendar is packed with economic data that could cause a reshuffling of currency exchange rates that will potentially benefit some of the higher yielding currencies. Markets will focus on US retail sales figures and the producer price index out this afternoon.

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.

The Bank of England has voted to leave interest rates on hold and decided against expanding its quantitative easing programme, despite the downbeat outlook for the UK economy. Currency rates for the euro are stronger on the back of positive German economic data while the US dollar and yen have slipped following a small rise in risk appetite in the market.

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.