Foreign Exchange - UK Daily Update - Wednesday, August 27, 2008 6:31 - 0 Comments

World First’s Morning FX Update – 27th August 2008

It was another day of records yesterday as the euro slumped to a 6 month low against the dollar; a move that was put in perspective by GBP/USD hitting the lowest it’s been in 2 years and with the pair now sitting 13% off of the highs we saw in October 07.

Euro was hit yesterday by an absolute shocker of a German Business Confidence figure. The IFO release was, as we predicted, a lot lower than expectations and saw the index plummet to a 3 year low. The German economy contracted in the second quarter of this year and with the downwards trend continuing unabated a Eurozone wide negative GDP figure for Q3 is not just possible but entirely probable. This could lead to a loosening of the ultra-hawkish ECB interest rate policy before the end of the year although whether we will see much benefit on the GBP/EUR cross remains to be seen; sterling is still a fairly sickly currency.

In a useful contrast US consumer confidence rose for the 3rd month in a row with most people polled seeing petrol prices fall and inflation concerns abate slightly. It was not all good news however as the influential Case-Shiller house price index declined; the US economy is by no means out of the woods.

Commodity currencies have also been on the rack recently as metal prices decline and speculators move away from the risky carry trade and instead look for safer plays.

Indicative Rates
	Sell	Buy
GBPEUR	1.2525	1.2550
GBPUSD	1.8420	1.8444
EURUSD	1.4686	1.4711
GBPJPY	200.79	201.59
GBPAUD	2.1417	2.1470
GBPNZD	2.6200	2.6266
GBPCAD	1.9240	1.9292
GBPZAR	14.32	14.38
USDZAR	7.77	7.80
GBPPLN	4.1530	4.1793
Rates are dependent on amount transacted Please call 0207 801 9080 for a live rate quote

———————-

 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.