Pound Euro Exchange Rate Could Climb, US Dollar Weakens On Obama Victory

Modified: Wednesday, 7 November 2012 05:49 BST - Written by John Cameron

STORY LINK Pound Euro Exchange Rate Could Climb, US Dollar Weakens On Obama Victory

What goes around, comes around, or so it appears in Athens. Greece’s parliament is due to vote on a new raft of austerity measures, which would save the ailing Hellenic economy a total of €13.5bn, later this week. Greek workers have responded to the news by staging a 48hr walk-out – probably the last thing a struggling economy needs. If the Greek parliament fails to rubber stamp the measures, then the debt-addled Hellenic state would be plunged into a fully-blown debt crisis, as it would fail to qualify for its next tranche of emergency funding from the EU/ECB/IMF ‘Troika’. The mere thought of such a scenario could weigh heavily on the euro in the lead up to the ballot. The GBP EUR exchange rate shied away from the 1.2500 level during yesterday’s session, but this is a move which is by no means guaranteed to endure as market participants focus on the Greek vote during today’s trading session.

Meanwhile, yesterday’s developments for the UK economy were only slightly more encouraging than those in Greece, following the release of a report from widely-respected think tank, the National Institute of Economic and Social Research, which predicted that Britain’s tame economic performance would continue into the year 2014. The NIESR used the evocative phrase ‘depression’ to describe the expected state of the UK economy during the intervening period.

Elsewhere, yesterday’s US Presidential election proved a close run thing in terms of vote share for the two contenders, however because of the Electoral College system which operates in the States, current incumbent Barack Obama registered a clear cut victory. Asian share markets traded slightly up on the news last night and the US Dollar suffered a mild bout of weakness thanks to an uptick in investor sentiment driven by the widespread relief which the decisive result brought. The GBP USD exchange rate is currently sitting just above the 1.6000 level.

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