Foreign Exchange - UK Daily Update - Thursday, October 30, 2008 9:16 - 0 Comments

Fed Rate Cut Bad News for Dollar – World First’s Morning Update – 30th October 2008

The Federal Reserve slashed its benchmark lending rate by 50 basis points to 1% in a unanimous move overnight. This saw the dollar slide for its largest one day fall in 23 years in the lead up to the announcement, eroding much of the Greenbacks newfound strength against Sterling and Euro. The Fed released a relatively gloomy statement with the release, admitting “the pace of economic activity appears to have slowed markedly”. The ball is now in UK and Europe’s court to cut rates in their next policy meetings, and this looks increasingly likely.

 

Stock markets outside of the US had another bullish day, all registering strong gains as confidence ebbs back into the markets. The improvement in risk appetite has seen currencies such as the Australian, New Zealand and South African currencies reverse some of their recent losses and will continue to be a major factor in deciding the commodity currencies values. Australian Dollar surged for its biggest ever three day gain, helped in part by some hawkish comments by the Bank of Australia’s Deputy Governor when assessing the inflation situation down under.

 

Looking ahead today, the data from the US will keep us on our tiptoes. Advanced GDP figures are expected to provide a negative reading of -0.5%, and PCE figures and Initial jobless claims are also added to the mix this afternoon. Overnight, the Bank of Japan also has their rate decision to make, which will provide Yen with some movement today. Interest rates are already at an eye watering 0.5%, leaving the BoJ little headroom to cut rates despite the recent murmurings suggesting they will.

 

 

Indicative Rates
	Sell	Buy
GBPEUR	1.2573	1.2601
GBPUSD	1.6598	1.6627
EURUSD	1.3188	1.3214
GBPJPY	163.42	164.26
GBPAUD	2.4220	2.4281
GBPNZD	2.7751	2.7799
GBPCAD	1.9808	1.9892
NZDUSD	0.5961	0.6013
GBPZAR	15.75	15.83
USDZAR	9.44	9.53
GBPPLN	4.3551	4.4126
EURJPY	130.03	130.84
Rates are dependent on amount transacted Please call 0207 801 9080 for a live rate quote

 

 

Please feel free to contact me (rick.roache@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.

 

To view any past or present currency blogs please click on the following link www.worldfirst.com/blog

 

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.