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“The big number ‘post Budget’ is this morning’s GDP readout. Everyone has acknowledged that Q1 of this year was going to be a dog and any downwards deviation from the expected 1.5% fall could see sterling move into the weekend with a bloody nose.”  Friday’s World First Morning Update.

UK GDP was released at -1.9% on Friday sending pound tumbling into the 1.10s against GBP/EUR and into the 1.44s against GBP/USD. This puts UK GDP on an annual figure of -4.1%, much worse than the -3.5% Alasdair Darling predicted in his now infamous Budget. Sterling did recover slightly into the weekend albeit with the aforementioned bloody nose.

News over the weekend was sparse although Asian markets have taken an interest in a news article from the German paper ‘Sue Deuttche Zeitung’ which reported that some German banks may be subject to another $1trn of write downs due to the Eastern European banking crisis. We’ll keep you informed as to how this progresses.

Risky assets have also started the new week poorly as fears over a global ‘swine flu’ pandemic are shouted from the front pages.

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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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