The pound euro exchange rate is 0.112% lower on the day with 1 GBP = 1.1450 EUR at 9 AM in London. The pound dollar exchange rate is 0.049% higher with 1 GBP = 1.6306 USD. The euro dollar exchange rate is 0.162% higher with 1 EUR = 1.4241 USD. The British Pound continues to enjoy a new found short term strength. With the state of Eurozone periphery finances and US finances coming under such intense scrutiny the UK continues to look like a safe harbour for international capital. Indeed, global risk aversion continued to rise during the Asia session after a day of further sovereign spread widening inside the Eurozone, and a poor session for US stocks. The euro dollar exchange rate traded 1.4162-1.4223 and dollar yen traded 77.01-77.40. The S&P 500 closed down -2.55%. AUDUSD remained under severe pressure due to declining risk appetite, and due to the rates market pricing in progressively deeper future cuts to the RBA’s cash rate. US June consume spending was reported at its lowest level since November 2010, confirming fears that domestic demand is currently not providing any meaningful support to the economy. It also added to nerves about US jobs data to come on Friday, as muted consumer confidence and business activity suggest little scope for a positive surprise. Elsewhere, the US Senate and President Obama signed off on the debt deal, which is aimed at raising the debt ceiling and cutting at least $2.1trn from the budget deficit. However, this came as no surprise. Moody’s affirmed the US long-term sovereign rating at Aaa in the wake of the deal on the debt ceiling, but lowered the outlook to negative. S&P has yet to give its verdict. ADP employment and the ISM non-manufacturing composite are due.

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