All this and more is available on our video blog at http://uk.youtube.com/user/WorldFirstJC

Risk aversion increased on currency markets yesterday as poor growth data from Europe, disappointing corporate earnings in the US and cautious monetary policy from the Bank of Japan.

EU GDP was worse than expected as the revised quarterly growth rate posted a 1.6% decline against a 0.2% contraction previously while the annualized growth rate fell by 1.5%, against a previous reading of 0.6%. EUR fell hard against USD into the 1.32s and weakened against sterling posting a close in the 1.11s.

Alcoa, an aluminium manufacturer, kicked off the earnings season in poor fashion while the Caterpillar, the machinery maker saw its share price fall as analysts expected the company to make a wider first quarter loss than expected. The dollar strengthened across the board on risk flows although sterling remains in a relatively strong position

The Bank of Japan left interest rates unchanged yesterday although they have allowed regional banks to use an increased variety of assets as collateral against loans. Yen however has strengthened due to risk flows.

The UK gilt auction yesterday for 2019 bonds was covered 1.82 times yesterday increasing the chances that the failed auction a fortnight ago was nothing but a misfire.

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.

To view any past or present currency blogs please click on the following link www.worldfirst.com/blog

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