The Greek parliament reluctantly passed the 2013 budget last night which will now see further cuts and tighter austerity implemented. The necessary steps were taken to ensure that the government complied with Troika requirements. The budget contains further cuts in pensions and public sector wages, which have already been cut by around 40% to date.
The economic outlook doesn?t get any better. National debt is expected to hit 190% of GDP by next year compared to Q2 figures for Ireland of 108% and approximately 82% for Germany. When the terms of the last Greek bailout were made back in March, targets were established that would see Greek debt reduce to 120% by 2020. Even back then, these figures were optimistic, now they?re becoming almost laughable. If the situation wasn?t so serious that is. Short term growth prospects aren?t any closer with GDP likely to post a year-end total of -4.5%.
The cash strapped nation can now receive the next tranche of the bail-out however the date is yet to be decided. The Eurozone finance ministers meet today, but it is not guaranteed that the decision will be made today so the situation is likely to be drawn out a little longer.
Trading on Friday was fairly muted. EURUSD pushed to a 2 month low, dipping under 1.27. GBPUSD fell lower passing 1.59. USD is hot at the moment as it continues to ride the wave.
China had a good weekend, posting an increase in exports for Oct alongside a much healthier trade balance figure. Following the strong data from last week it confirms the turnaround we have been waiting for in China is underway.
Japan wasn?t as fortunate as their newly revived neighbours. The economy contracted by -0.9% in Q3 down from 0.1% previously. External demand is the main culprit, directly resulting from the stronger Yen. Japan is expected to struggle into 2013 with pressure mounting on the government to move away from monetary policy solutions and implement more structural fiscal reforms.
Looking forward, it?s a very quiet day today. US markets will be closed for Veteran?s Day and the highlight from Europe is the finance ministers meeting in Brussels.
Have a great day.
Latest exchange rates can be found here or for interactive rates, graphs and charts click here
Indicative Rates Sell Buy
GBPEUR 1.2520 1.2550
GBPUSD 1.5960 1.5980
EURUSD 1.2730 1.2750
GBPJPY 126.60 126.90
GBPAUD 1.5320 1.5350
GBPNZD 1.9545 1.9570
GBPCAD 1.5950 1.5980
NZDUSD 0.8155 0.8180
GBPZAR 13.8870 13.9290
USDZAR 8.6850 8.7250
GBPPLN 5.1940 5.2270
EURJPY 101.00 101.30
Please note these rates are ?interbank? rates ie they indicate where the market is currently trading and are not indicative of the rates offered by World First. Rates are dependent on amount transacted. It is important to remember that foreign exchange rates fluctuate all the time. The rate you will receive will depend on the amount and currency you require. Please call 0800 783 6022 or +44 20 7801 9080 for a live quote or login in to your Online Account here.
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