George Galloway interviews Michael Wilson on Euro debt crisis

From Harpers:

Sterling hit a seven week high against the US dollar but dropped by around 1.5% against the euro as European leaders struck a deal on the euro zone debt crisis.




Currency rates & Comments -- October 28

EURO/GBP - 1.1356
US$/GBP - 1.6054
CHF/GBP - 1.3887
CAN$/GBP - 1.5961
AUS$/GBP - 1.5072
ZAR/GBP - 12.4542
JPY/GBP - 121.95
HKD/GBP - 12.4958
NZD/GBP - 1.9656
SEK/GBP - 10.2248
AED/GBP - 5.798
US$/EURO - 1.4151



The agreement saw risk appetite improve significantly and investors look to invest in the euro again. Sterling's underperformance against the euro has been put down to a recent run of investors reversing 'safe haven' holdings in sterling as UK data underperformed and the Bank of England announced a 2nd round of Quantitative Easing. Sterling had held steady all week against the euro as investors awaited the results of the EU summit, however the announcement that came early yesterday morning saw a large swing of volatility. One upside for sterling is that it may strengthen towards $1.63/£1 against the US dollar.

In the euro zone, the euro surged by 2% against the US dollar as investors traded on the optimism of the announcement of a solution to the euro zone debt crisis. After a night of deadlocked talks, markets hardly reacted at all, but when the US markets opened, the euro made ground breaking above $1.41/€1, coming within touching distance of $1.42/€1. Stock markets rallied around the world on the market optimism. Some analysts however are less than optimistic pointing to the lack of detail on implementation of the plan.

In the USA, with all eyes on Europe it was fairly easy to forget about important data released in the USA -- 3rd Quarter GDP growth figures. The US economy grew at a pace that was expected by markets, delivering figures of 2.5% growth. This was boosted by an increase in consumer spending and other positive economic data, with unemployment claims decreasing by 2000 for the week.

Elsewhere, in other news this week, the New Zealand dollar strengthened against its counterparts as the central bank governor announced plans to potentially increase interest rates. The Japanese central bank announced a fresh round of 5 trillion yen's worth of Quantitative Easing.


George Galloway speaks to Sky News journalist Michael Wilson on the Euro debt crisis.

Originally broadcasted on talkSPORT 28th October 2011.

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