Skip to content

World Markets continue lurch downwards

Pound: Sterling traded close to two-month highs against a broadly weaker euro yesterday as investors worried European Central Bank buying of Spanish and Italian bonds would have only a limited positive impact on the euro zone’s debt crisis. A lack of UK data or news flow meant the pound’s direction was mainly driven by risk sentiment, further dented when Standard and Poor’s cut its U.S. Sovereign rating to AA+ from AAA late on Fri-day, hitting stock markets and riskier assets. Sterling gained around 0.6 percent to 1.1545, bringing it close to a two month high of 1.1554 hit last week. However, sterling could be at risk if the Bank of England cut its growth forecast in its quarterly inflation report due on Wednesday. UK economic data has consistently surprised on signal that it will not raise interest rates within the next year even though inflation has been stubbornly above the BOE’s target range.
Data 9.30: Manufacturing Production m/m.


Euro: Eurozone leaders have vowed to do ‘whatever it takes’ to ensure the euro area’s stability. The European Central Bank’s decision to buy Italian and Spanish bonds makes it the only eurozone institution to match such slogans with actions. The rest of the eurozone governing system – its elected governments above all – must now show equal determination in order to solve this existential crisis. ECB’s Trichet said ‘When markets are in tur¬moil our interest rate policy does not reach all economies. The we can take unconventional measures for mone¬tary policy consideration such as buying bonds’. The dollar gained around 1.5 percent against the single cur¬rency to 1.4180, from a high of 1.4400 earlier in the day.
No Major Data due today.


Dollar: The U.S. Dollar pulled back against most of its leading counterparts in overnight trade as markets di-gested the sharp rally in the safe-haven currency over the preceding 24 hours. The greenback declined as much as 0.4 percent on average, with the correction likely to continue as markets look ahead to the policy an-nouncement from the Federal Reserve. The Federal Reserve meets today on monetary policy and may prolong a pledge to maintain record monetary stimulus, The central bank could do so by making a commitment to hold its $2.87 trillion balance sheet steady for an ‘extended period’. Fed policy makers are likely to embark on a third round of large scale asset purchases, moving ‘more decisively’ to secure the U.S. Recovery. The bias is for the dollar to weaken.
Data 19.15: FOMC Statement, Federal Funds Rate.


• Australia’s dollar erased a 2.5 percent intraday loss against the greenback as Asian stocks pared their earlier decline, reviving demand for higher yielding currencies.
• Investors fled stocks on both sides of the pond yesterday, with stocks dipping to levels not seen since 2008.


For more information or to request a call back click here


GBP/USD                        1.6340

GBP/EUR                        1.1500

EUR/USD                        1.4210

GBP/JPY                         126.45

GBP/AUD                        1.6100

GBP/NZD                         2.0030

GBP/ZAR                         11.88

GBP/CHF                         1.2330

GBP/CAD                        1.6330

GBP/SGD                        1.9880

GBP/THB                         48.85

GBP/HKD                        12.7660

red-down; blue-up (snap shot)

These rates are for indication purposes only.


For more information or to get the latest spot rates contact:


John Paul Georgiou

Senior Foreign Exchange Broker

+44 (0) 20 7959 6917      


For more information