Friday afternoon was volatility distilled as US Non-Farm Payrolls once again proved to be a sentiment driver of massive proportions. The figure fell to -651k against a consensus view of -650k to the lowest level in 60 years with pronounced losses seen in the construction and manufacturing sectors. The unemployment rate also surged to 8.1%. Dollar initially weakened after the announcement as those predicting huge losses (700k or so) were priced out of the market but risk aversion kicked back in before the close of play sending pound lower against all crosses.

The big news in the UK over the weekend is that the Lloyds banking group have had to accept funds from the UK government; the taxpayer now owns around 65% of the group. This has caused massive political fallout for 2 reasons; Lloyds was one of the UK banks least exposed to the credit crunch due its lack of securitisation speculation but since taking over the beleagured HBOS has had to write off serious lumps of cash. The second is that most of Lloyds investors are private individuals and/or pension funds as, up to now, it was a decent play for those simply looking for cash from a dividend.

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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