Prime Minister Brown and Chancellor Darling laid out the UK government’s first step to reinvigorating the ailing property market yesterday. The basic crux of it is a stamp duty holiday for properties below a value of £175,000, which according to Treasury figures will cost Gordon Brown’s government around £600m.

But only, once the dust had settled from the speech and Gordon Brown had turned his attentions to other matters, did Downing St admit that they had not earmarked as to where this cash would come from. We can expect details to be laid out in the Chancellor’s Pre-Budget report due for release in October. Needless to say these assertions have done little to strengthen sterling’s position.

4 year old resistance levels are currently what are keeping Cable from plummeting lower as the dollar continues its relentless march. With news that Hurricane Gustav missed important oil installations in the Gulf of Mexico saw the price of crude dip sharply back towards the $100 a barrel mark, fuelling momentum and allowing dollar bulls to gorge at the trough.

Manufacturing figures from the US threatened the rally as the ISM reading fell slightly into contractionary territory however this merely acted as a speed bump in the course of the day.

Forex markets will continue their recent policy of volatility today through the relatively packed data schedule. Service sector data from both the UK and European economies should both be poor; which is worst being the necessary indicator. Form would dictate that it would be the UK’s. The Fed Beige book, due for release later this evening, should also paint a picture of a solidifying US economy.

Challenger job cuts are also published today; these should give us an indication ahead of Friday’s Non-Farm Payroll release.

———————-

 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.