News that the US Government is looking to part nationalise Citigroup to the tune of 40% of the company’s share capital helped sterling higher as financial sector stocks recovered on global bourses. RBS shares were also higher as the market looked over their efforts to restructure themselves by selling off toxic assets in a positive light.

Although sterling has rallied to recent highs momentum is starting to peter out. Picture GBP and EUR as 2 participants in a battle; once you have hold of the enemy and start to push them back you never ease off, not for a second. GBP has tested higher levels and been repelled on both occasions and GBP sellers need to be wary of a EUR counter attack.

Yen, once the major beneficiary from any poor piece of data, is starting to lose its sparkle. Following the resignation of Japanese Finance Minister and the publication of some truly horrendous growth figures the Japanese currency no longer deserves ‘safe haven’ status.

Euro could strengthen today as the German IFO announcement is set to pull higher for the 3^rd consecutive month while data from the UK from the mortgage market is expected to show that the credit tap is still dribbling as supposed to gushing. Ben Bernanke also makes his first trip to Capitol Hill this year to give testimony to Congress.

Further analysis is of course always available at our video blog http://uk.youtube.com/user/WorldFirstJC

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.

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