The ripple effect from Friday’s US consumer confidence continued to be felt yesterday as global equity markets plunged by the largest amount in 6 weeks.
The Chinese stock exchange, the Shanghai Composite, was down by 6% with other global bourses down by anywhere between 0.5% and 4% in trading. The Chinese is an important bellwether for the world economy and while we need to wait for bearish confirmation in equity markets the signs are certainly there. An index is set to be in a bear market if it falls by more than 20% from its recent high; the Shanghai Composite was down by 17% at the start of today’s trade.
Overnight stocks have held their own with most markets flirting between gains and losses. Yesterday there was no economic data hold up markets aside from Empire Manufacturing hence the US markets relative outperformance yesterday.
As a result of this anti-risk mentality the USD strengthened massively against its basket of currencies pushing sterling to a 1 month low and euro to a 3 week nadir. GBP/EUR is still stuck in its very tight trading range although ZEW economic sentiment pay push this lower today. Other data due today includes UK CPI (we predict a fall to 1.5%) and US Housing Starts (consensus 598k)
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Latest Exchange Rates At Time Of Writing
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Indicative Rates
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Sell
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Buy
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GBP/EUR
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1.1592
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1.1618
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GBP/USD
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1.6391
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1.6417
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EUR/USD
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1.4123
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1.4143
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GBP/JPY
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155.75
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156.28
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GBP/AUD
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1.9813
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1.9852
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GBP/NZD
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2.4362
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2.4404
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GBP/CAD
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1.8068
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1.8113
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NZD/USD
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0.6711
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0.6734
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GBP/ZAR
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13.26
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13.31
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USD/ZAR
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8.10
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8.12
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GBP/PLN
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4.8718
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4.9116
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EUR/JPY
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134.41
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134.65
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Rates are dependent on amount transacted. Please call 0207 801 9080 for a live rate quote.
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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.
To view any past or present currency blogs please click on the following link www.worldfirst.com/blog.
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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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