The euro is being hammered from all sides at the moment as it slipped to a 2 month low against the pound, a one year trough against the dollar and a two year nadir against the yen.

Following in the footsteps of the Irish, the Greek parliament implemented a total guarantee of ‘all bank deposits, whatever the amount’. This news infuriated Brussels as they worried whether Europe will end up with a split banking system; funds from UK banks are already flowing to Ireland to relax in the protection of the Irish government’s AAA credit rating. A summit is due in Paris this weekend between the French, British, Germans and Italians although the chances of a clear message being formulated are slim. Confusion has descended on Europe.

The single currency was also undermined by comments from Jean-Claude Trichet that the ECB had considered cutting interest rates. Data from both the EU and its member states has been poor of late with inflationary risks declining but growth problems now coming to the fore.

We, and the world, hope that the disorder in the EU is not replicated in the US as the House of Representatives meet to vote on the latest version of the TARP. Stock markets were sharply lower yesterday as anxiety still pervades; a vote is expected at around 7pm BST.

Combined with the vote today is almost a perfect storm of economic data which will exacerbate existing volatility. The primary focus will be US Nonfarm Payrolls which is forecast to show more Americans lost their jobs in the past month; yesterday’s initial jobless claims rose to a 7 year high. European data comes in the form of retail sales which is anyone’s guess but will no doubt promote some furious buying and selling as traders close positions before this weekend’s summit. UK services PMI is also believed to be contractionary.

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.