Sterling was under pressure yesterday as reports from the industrial and manufacturing sectors were much weaker than expected. This of course points to a further pain for the UK economy and gives the MPC more food for thought ahead of their meeting. Problems in the UK financial sector also undermined sterling and gave speculators another reason to sell the pound.

The dollar gained against sterling yesterday but the move was tentative and a shift back higher is entirely possible. 2 of the largest lenders in the US Fannie Mae and Freddie Mac were crucified by the markets yesterday as reports arose that they may need capital injections and may also be subject to credit rating downgrades by Moody’s and S&P.

 There was little news out of the G8 meeting yesterday although controlled exchange rates were mentioned in a brief communiqué. 

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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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