Friday’s volatility was once again caused by the financial services sector; in the UK, US and EU.

HBOS, the country’s biggest lender of mortgages and now part of the Lloyd’s banking group, revealed losses totalling more than £10 billion on asset write downs just days after RBS announced the largest single year corporate loss in UK history. News after the market that HSBC may start the largest rights issue ever to shore up its capital reserve is another punch to the kidneys.

The part-nationalisation of Citi went through on Friday with the US government now owning more than 36% of what used to be the biggest bank in the world. Stock markets didn’t like it at all and plunged the DJIA and the S&P below important trading ranges although a recovery was seen later in the day.

Fears in the EU continue as the eastern European banking problems continue unabated. A detailed look at this and the potential effects will be available in this week’s ‘Sterling Update’.

Data continues to be poor from most economies and heightened risk aversion will see crosses remain volatile until further notice.

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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