Foreign Exchange - UK Daily Update - Tuesday, September 23, 2008 6:39 - 0 Comments

Dollar Weakens as Oil Spikes – World First’s Morning FX Update – 23rd September 2008

Dollar has continued its recent wobble overnight as the sticky bargaining of Washington slowed the $700bn US government bail-out plan. Senate Democrats are looking for greater oversight of Wall St and want assurances that money paid by taxpayers from Wyoming and Montana are not going straight into the pockets of CEOs; everybody agrees however that Congress needs to work quickly but carefully.

As a result commodities priced in dollars went bananas yesterday including a record single day rise in the price of WTI crude. Oil started the day at around $105 a barrel before streaking to $130 before paring back to the teens.  The jump was exacerbated by speculators covering short positions and data showing weaker supplies from Mexico, Nigeria and Saudi Arabia. Gold also leapt higher, securing prices above the $900 level for the first time since early august.

The day’s movements will largely depend on news out of the US as there is very little tier 1 data for release today. We will be looking to equity and energy bourses for direction.

  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.