A global equity rally over the course of last week helped weaken the dollar on Friday as risk aversion decreased. Sterling also made significant gains euro for the first time in weeks as European CPI fell by a larger margin than expected and rumours abounded as to how much the ECB would cut rates by this Thursday.

The weekend has also seen speculation that the UK is due to join the European single currency as a direct consequence of the global financial turmoil. Jose Manuel Barroso said on French radio on Sunday that many UK politicians he’d spoken to had expressed an interest although this will merely make headlines as supposed to policy at a time of increased financial crisis.

Today’s data schedule is focused on the manufacturing sector with PMI readings from the UK and the Eurozone and an ISM reading from the US. We would expect sterling to weaken over the course of the week as we wait on the Bank of England’s meeting on Thursday.

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.

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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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