Despite banking shares making gains in yesterday’s trade sterling is still very depressed. Barclays, Lloyd’s and HSBC were all significantly higher however any sentiment that fed through to sterling as a result was quickly eroded by poor industrial and manufacturing production figures from Blighty.

Industrial production fell 2.6% in February against a January figure of -1.7% while manufacturing output declined to 2.9% after January’s 2.2% fall.  Further bad news could be in store for GBP as the influential NIESR GDP estimate puts growth for the UK economy down 1.8% in the month of February.

Global equity markets were all higher yesterday however the US dollar was not hurt by the increase in risk appetite and instead latched on to bullish comments from Fed Chairman Bernanke and Citigroup boss Vikram Pandit. Chairman Bernanke stated that if the government and, at an extension, the Obama stimulus package works the recession may be over by the end of this year. That is of course a pretty big ‘if’.

Citigroup’s Pandit, in an internal memo, described the current quarter as the company’s best since 2007 and that the company was profitable in the first 2 months of this year, helped by a slight thawing of credit markets and some notable cost cutting exercises being ahead of schedule.

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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