As predicted the ECB hiked rates in the Eurozone yesterday to 4.25%, a 0.25% increase. This however had already been fully priced into EUR crosses and thus it was left to Trichet’s post decision press conference to signal as to the future course of near term decisions. His term was less hawkish than previous policy speeches have been and in a Reuters snap poll as Trichet left the stage scores of economists lowered their expectations of future rate hikes. Maybe one was enough?

As today is a US holiday Non-Farm Payrolls figures were released yesterday. Wednesday’s ADP employment change release was less than complimentary and we were prepared for a shocker however the figure was close to expectation and dollar bears slunk away from the market.

 Overnight issues with Bradford and Bingley’s, or Buggered and Badly as is probably more appropriate to call them, fund raising came to light. TPG, an American private equity firm withdrew its cash injection offer as Moody’s downgraded its credit rating and the deal became progressively expensive. The FSA has stepped in however and prepared a lifeboat so as to prevent another Northern Rock.

Have a good weekend and may we wish all of our American clients a happy Independence Day.

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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.

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