Foreign Exchange - UK Daily Update - Written by jeremy on Wednesday, May 6, 2009 7:18 - 0 Comments
A Risky Week Starts - World First’s Currency Exchange Morning Update - 6th May 2009
All this and more is available on our video blog at http://uk.youtube.com/user/WorldFirstJC
Sterling rocketed to a 4 month high against the dollar yesterday as equity markets continued the latest phase of their bull run. Sterling was also 0.8% higher against the euro and 0.9% higher against the Swiss Franc before dropping back slightly towards the end of the day.
The pound obviously stands to benefit from increased risk appetite and news that probably the most important stock index in the world, the S&P500, moved into positive territory for the year yesterday increased sentiment amongst market participants. Profit taking by these investors will hamper sterling gains however.
On Thursday and Friday we have a huge amount of event risk surrounding the G3 currencies (USD, GBP and EUR). Thursday sees both the Bank of England and the European Central Bank announce their latest interest rate decisions. Whilst the Bank of England are expected to leave everything as it stands from an interest rate and quantitative easing point of view it could be all change at the ECB.
A poll of 60 economists by Bloomberg suggests that the ECB will cut rates by 25bps and any hints on the quantitative easing standpoint could see euro weaken massively. It won’t be an easy win for sterling however as Thursday also sees the publication of the ‘stress tests’ of US banks. These have been designed to show whether should another downturn in credit adversely affect these major financial institutuins and do they have enough cash on balance to deal with it. Should a large proportion of these banks ‘fail’ sterling would be expected to decline. Friday is also the first Friday of the month and therefore sees the release of the Non-Farm Payroll numbers.
Today’s data features ADP employment change, UK PMI services and EU retail sales.
World First’s Twitter page is up and running and we will be live ‘tweeting’ the impact of all these data releases and how they affect the markets. Click below for up-to-date news on all things currency. The address is http://twitter.com/World_First
Indicative Rates
|
Sell |
Buy |
|
|
GBPEUR |
1.1283 |
1.1311 |
|
GBPUSD |
1.5015 |
1.5045 |
|
EURUSD |
1.3323 |
1.3351 |
|
GBPJPY |
147.46 |
147.98 |
|
GBPAUD |
2.0282 |
2.0341 |
|
GBPNZD |
2.5895 |
2.5975 |
|
GBPCAD |
1.7651 |
1.7722 |
|
NZDUSD |
0.5788 |
0.5816 |
|
GBPZAR |
12.77 |
12.82 |
|
USDZAR |
8.47 |
8.52 |
|
GBPPLN |
4.9435 |
4.9688 |
|
EURJPY |
130.64 |
131.09 |
|
Rates are dependent on amount transacted |
||
Please feel free to contact me (jeremy.cook@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar. If you would like to discuss your foreign exchange requirements, please contact our: Corporate Foreign Exchange Team on 020 7801 9050 or our Private Client Currency Exchange Team on 020 7801 9080. Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.
To view any past or present currency blogs please click on the following link www.worldfirst.com/blog
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