Yesterday was yet another momentous day on the markets as rescue and bail out plans helped equity bourses repair some of the damage caused by last week’s record decline. Whether this is a true recovery or nothing but a dead cat bounce will become evident in the coming days but the signs for sterling are better than they’ve been in a long time.

The Treasury moved quickly to inject funds into 3 of the UK’s major banks reversing the recent fortunes of the pound and leading investors to prefer sterling over most of its crosses. The part nationalisation and guarantees of £250bln of banking debt is a serious move with our trans-Atlantic cousins looking to ape the measures in response to their continual problems.

George Bush is due to announce that $250bln of the $700bln recently approved by Congress will be put into a bank recapitalisation program with banks such as Goldman Sachs, Morgan Stanley and Citigroup expected to receive $25bln each. This could underpin the dollar in the long term. The Europeans weren’t going to be left out and announced a joint deal worth £1,465bln which will too be modelled on the UK’s plan of action.

All this news contributed to significant gains on equity bourses with the Ftse up by close to 9% and the DJIA leaping up 11%, a record one day rise. Government debt was sold heavily to fund plays in the stock markets and as such we saw ‘riskier’ currencies profit over those regarded to be ’safer’. USD, CHF and JPY all were lower while GBP, AUD, NZD and ZAR all benefited. Gold, a good barometer of how screwed we all are, fell precipitously yesterday.

In normal times today’s CPI figure would be garnering a lot of headlines and column inches; with what’s going on at the moment you’d half expect more space to be given to a Sudoku. CPI for the UK is expected to rise to 5% for the month of September and we expect it to fall, maybe drastically over the coming quarters as the flow through of lower commodity prices and winter sales on the High St help out Joe Public. The German ZEW economic sentiment reading at will also prove to be interesting reading.

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.