Foreign Exchange - UK Daily Update - Written by jeremy on Tuesday, April 7, 2009 7:18 - 0 Comments
Equity Market Falls Sap GBP’s Strength - World First’s Morning Update - 7th April 2009
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Sterling hit 2 month highs against dollar before falling equity markets took the air out of the rally’s balloon. News from HSBC on Sunday night that they had obtained a 97% participation rate in their rights issue shored up sterling and the FTSE in early trade but by the early afternoon those gains had vanished as investors that markets may see a phase of consolidation.
The picture is little different in the battle between GBP and EUR. As we stated in Friday’s morning update a close above 1.1050 is needed to really show the market whose boss however this has not been forthcoming. The danger now is that the market takes this as a form of weakness and marks sterling down accordingly.
Overnight the AUD has strengthened against the majority of its trading partners as the RBA cut rates by 0.25% to take the key cash rate to 3%. This amounts to 4.25% of cuts since September and further cuts are expected as unemployment continues to rise. Risk to sterling will be found in the Industrial and Manufacturing production figures due at 09.30 while European GDP is due at 10.00 with the final figure expected to meet the ‘flash’ estimate we saw 2 weeks ago at -1.5%.
The week before last the UK suffered its first failed Gilt auction since 2002 and attention has moved back to these normally dependably safe assets. A UK 30 year gilt auctions was covered 1.59 times yesterday raising hopes that the failure was a one off; a 10 year auction is due today.
|
Indicative Rates |
||
|
|
Sell |
Buy |
|
GBPEUR |
1.0989 |
1.1015 |
|
GBPUSD |
1.4714 |
1.4740 |
|
EURUSD |
1.3375 |
1.3401 |
|
GBPJPY |
147.62 |
148.15 |
|
GBPAUD |
2.0545 |
2.0604 |
|
GBPNZD |
2.5169 |
2.5244 |
|
GBPCAD |
1.8189 |
1.8253 |
|
NZDUSD |
0.5823 |
0.5851 |
|
GBPZAR |
13.41 |
13.48 |
|
USDZAR |
9.09 |
9.17 |
|
GBPPLN |
4.9051 |
4.9402 |
|
EURJPY |
134.20 |
134.45 |
|
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.
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