Mervyn King and the MPC held rates at 5% as was widely expected as further bad news from the housing and car markets pushed sterling lower; data from the Halifax building society showed that house prices have fallen by 10.9% on a year by year basis whilst new car registrations were down according to the Society of Motor Manufacturers and Traders. With the outlook waters muddied by these and other poor figures, while we believe we’ll see a cut by the end of the year, opinion is split in the wider arena and any decision for a cut will be backed by a split minutes reading.

The ECB also held rates but endured a torrid time on the markets as Luxembourg’s Prime Minister declared the single currency to be overvalued despite the recent falls. European banking stocks were also sent lower, this time by Trichet, as the ECB is to take a stance and clamp down on abuse of its recent liquidity provisions, raising fears over funding issues. Regardless of this weakening GBP/EUR is still trading below the 1.23 level.

Today will be dominated by the US Non-Farm Payrolls announcement which is expected to show that more Americans are out of work than a month ago. Other due data is fairly second tier.

Have a great weekend.

———————-

 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.