IMS FX BEST FOREIGN EXCHANGE RATES FOR EUROS

IMS FX MORNING REPORT for Wednesday 3rd November 2010

Today's Interbank rates -

POUNDS TO US DOLLARS 1.6133
POUNDS TO EUROS 1.1483
POUNDS TO AUSTRALIAN DOLLARS 1.6138

EUROS TO US DOLLARS 1.4049
EUROS TO POUNDS 0.8708
EUROS TO AUSTRALIAN DOLLARS 1.4053

POUND HEADLINES:

• UK PMI construction fell more than expected causing the pound to tumble against all major currencies. PMI construction plunged to its lowest level since February this year amid government spending cuts. The British pound reaction subsequent to the report was an immediate sell off against all major currencies.
• The reading is of particular interest due to the face that the lower PMI suggests that orders for materials are lower and the economic outlook is negative.
• UK PMI services data for October comes in at 53.2 beating expectations of 52.6 rising from Septembers 52.8

EURO HEADLINES:

• Euro spiked higher yesterday moving above 1.40 against the dollar as positive data and continued speculation about the Fed led the dollar lower across the board
• EU periphery spreads widened again yesterday, with Irish spreads hitting a new high over Germany. At this stage the focus is on the US and Fed rather than the eurozone periphery, but the fact that the Euro also gained against sterling and other currencies yesterday suggests the FX market is happy to ignore the issue for now.
• USD rather than Euro news will dominate today

US DOLLAR HEADLINES:

• Voting in the US elections is now over and as focus switches to exit poll results and the potential consequences, the FOMC will prepare to deliver its latest assessment of the US economy and its prospects.
• The Fed will announce later its plans to stimulate the economy with expectations high that they will reintroduce QE. It is expected that the Fed will pump around 500bn into the economy to boost the fragile recovery. The economy grew by an annual rate of 2% between July and September - not enough to reduce high unemployment.
• Ahead of Fridays non-farm payrolls report, today's ADP employment report and non-manufacturing ISM will be closely watched. We look for an improvement in both compared to last month.

If you need to buy, sell or make an international payment today then please call me for a free quote.

Kris Charalambides

FX Broker

kris@imsfx.co.uk

www.imsfx.co.uk

Tel: 0207 183 2790