Foreign Exchange - UK Daily Update - Written by jeremy on Wednesday, November 26, 2008 7:41 - 0 Comments
GBP Makes Ground Against USD - World First’s Morning Update - 26th November 2008
In these rather jaded times government bail-out programs and billion dollar injections are just like buses; nothing for a while and then two in quick succession. After Alistair Darling’s Pre Budget Report on Monday Treasury Secretary Hank Paulson outlined an $800bln plan to support consumer and SME loan activity as well as securitising close to $600bln of mortgages held with Fannie Mae and Freddie Mac. The original bail out plan, approved by Congress, was $700bln but given that the Treasury has committed nearly $300bln to Citibank more funds were needed. This money will not need congressional approval however as it is not coming from government coughers but instead is being printed as new money by the Fed which of course has its own problems.
Dollar weakened as soon as the announcement was made as risk aversion subsided; a large amount of USD strength is down to poor sentiment and efforts to stabilise any market will make speculators feel slightly less down in the mouth.
Housing data from the US yesterday was pretty dire with the influential Case-Shiller composite falling to another record low. The housing bubble markets that filled investment brochures recently (Phoenix, Las Vegas, Miami) are now flooded with foreclosures with Detroit also falling calamitously in light of the automobile industry’s recent problems.
Today will be a busy day on both data and sentiment fronts. Preliminary GDP figures from the UK are set to confirm that the UK economy is in a recession while German CPI is set to shed close to 1% point and increase fears of a Eurozone wide deflationary cycle. Further news from the US employment market is also due alongside consumer confidence from the University of Michigan. Stock markets may be busy today and markets volatile as US investors and speculators jump out of positions before the long Thanksgiving holiday weekend.
|
Indicative Rates |
||
|
|
Sell |
Buy |
|
GBPEUR |
1.1822 |
1.1851 |
|
GBPUSD |
1.5346 |
1.5374 |
|
EURUSD |
1.2965 |
1.2989 |
|
GBPJPY |
145.44 |
146.15 |
|
GBPAUD |
2.3800 |
2.3849 |
|
GBPNZD |
2.8014 |
2.8100 |
|
GBPCAD |
1.8790 |
1.8907 |
|
NZDUSD |
0.5452 |
0.5494 |
|
GBPZAR |
15.26 |
15.31 |
|
USDZAR |
9.90 |
9.99 |
|
GBPPLN |
4.4825 |
4.5276 |
|
EURJPY |
123.00 |
123.52 |
|
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.
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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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