Oil and commodity markets helped the dollar strengthen yesterday as the EUR/USD pair slipped down to the 1.38s. A smidge of momentum was lost overnight as profit takers swooped in however risk aversion has jumped as well due to the continuing fears over Lehman Brothers. Talking heads were fairly cautious about naming suitors simply because we believe there are none.

In the face of rising inflation Gordon Brown dipped into his honey pot and unveiled measures to help consumers pay energy bills. The UK has been racked by huge gas and electric price increases and with commodity markets still inflated price rises are probably not over.

The Polish zloty has been a volatile beastie of late and this doesn’t look like abating any time soon as rumours over Poland adopting the euro were reported by Reuters yesterday. Prime Minister Tusk indicated yesterday that they would look to join by 2011 and although this is certainly a feasible aim; a lot of framework will have to be put in place to facilitate it. In the meantime analysts are looking for zloty to trend weaker.

Have a great weekend.

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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.   

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.