Foreign Exchange - UK Daily Update - Written by rick on Monday, October 27, 2008 17:17 - 0 Comments
The Perfect Storm - World First’s Morning Update - 27th October 2008
It was the perfect storm for Sterling on Friday, with the release of the Q3 GDP figure inciting the biggest daily fall against the Dollar, and causing Sterling to reach its lowest ever levels against the Euro. Figures showed that the British economy shrank by 0.5% for Q3, the first decline since the early nineties and at a rate far exceeding consensus expectations of 0.2%. Recession has been a vacant word in the vocabulary of politicians for some time; however it may be a word we grow used to hearing, as expectations are that the growth will continue to be on the downside for up to 8 quarters.
The Yen managed to reach 13 year highs against the Dollar and Sterling on Friday, and was consistently strong across the range of currencies, taking over 16% out of the NZ and Aussie Dollar’s sails and touching a six year high against Euro. US Dollar’s performance was equally impressive as worldwide panic forced investors to liquidate positions in riskier high yielding currencies, equities and commodities.
Equity markets were down heavily as a result of the calamity, and early mornings trading in the Asian markets also looks dire. Central banks are rushing to the scene, with The Bank of Korea cutting interest rates by 75 points to 4.25% in order to try and restore some confidence in the markets. The Australian Central bank has admitted it intervened in the currency markets on Friday to support its weakened currency, and there are fears that the Japanese Central Bank will take action to weaken its currency in order to aid the export dependent nation.
Today is once again light on data, but will no doubt keep us entertained; the only piece of tier 1data is new home sales in the US.
|
Indicative Rates |
||
|
|
Sell |
Buy |
|
GBPEUR |
1.2382 |
1.2412 |
|
GBPUSD |
1.5422 |
1.5455 |
|
EURUSD |
1.2436 |
1.2461 |
|
GBPJPY |
143.11 |
144.26 |
|
GBPAUD |
2.5407 |
2.5455 |
|
GBPNZD |
2.8314 |
2.8361 |
|
GBPCAD |
1.9801 |
1.9903 |
|
NZDUSD |
0.5414 |
0.5494 |
|
GBPZAR |
17.36 |
17.45 |
|
USDZAR |
11.19 |
11.60 |
|
GBPPLN |
4.7635 |
4.8365 |
|
Rates are dependent on amount transacted |
||
Please feel free to contact me (rick.roache@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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