Foreign Exchange - UK Daily Update - Wednesday, October 1, 2008 6:47 - 0 Comments

Markets wait for Senate Vote – World First’s Morning FX Update – 1st October 2008

The US senate is due to vote on a new version of the Treasury’s financial bail-out plan tonight, news that seemed to calm markets yesterday. Saying that the bill will pass is a little too close to tempting fate for my liking but given that only 1/3 of Senators are up for a re-election this year I’d say it has a much better chance than the one that was felled by the House of Representatives in a fit of pique and self interest.

The new bill has a number of provisions that are designed to bring Republicans back to the table such as increasing the Federal insurance on deposits from $100,000 to $250,000 and tax breaks for small and medium sized businesses. Whether these measures will prove palatable to those members of the House of Representatives who spat their dummies out on Tuesday remains to be seen.

Yesterday was yet again another volatile day in the world of currencies with a sharp and determined move by the dollar against its major crosses shocking the market as data released was fairly terrible. The Case-Shiller home price index fell by 0.9% sending the year on year figure to -16.3% although this was offset by consumer confidence which rose to 59.8 from an expected 55.0. This is what we believe gapped cable lower and by so much as it is such a strange reaction to the recent turmoil.

News flow and reaction will once again be dominated by the political wrangling that surrounds the TARP and we expect sterling to come under pressure from poor manufacturing sector figures. ADP employment, the important precursor to Friday’s Nonfarm Payrolls number, is due today with a dip expected.

Indicative Rates
	Sell	Buy
GBPEUR	1.2628	1.2656
GBPUSD	1.7848	1.7874
EURUSD	1.4113	1.4136
GBPJPY	188.81	189.58
GBPAUD	2.2368	2.2421
GBPNZD	2.6505	2.6566
GBPCAD	1.8877	1.8945
NZDUSD	0.6714	0.6750
GBPZAR	14.73	14.79
USDZAR	8.24	8.29
GBPPLN	4.2660	4.2960
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.